The opening scene of the movie shows a prediction of what should happen in the future of the movie. It shows Naruto battling a monster, only to be impaled by its tail, killing him and the Nine Tailed Fox inside of him. A funeral is held for Naruto in his home village, to which Sakura Haruno, Rock Lee and Neji Hyuga are shown to attend, along with others. Finally, the scene shows Tsunade looking out her window, asking if 'Everything is just decided by fate'. The setting then returns to a few days previous, where a man named Yomi attacks a shrine to retrieve the spirit of Mōryō, a demon who attempted to take over the world and create his "Thousand Year Kingdom". Since he is lacking a body, Yomi offers his as a temporary substitute until they can retrieve Mōryō's original one.
The only threat to Mōryō's plan is a priestess named Shion, who has the ability to seal his spirit away once more. He raises a stone army from their slumber to attack the rest of the world while his four subordinates go to eliminate Shion. They are given special chakra creatures to enhance their strength.
To deal with the threat, Konohagakure sends out many advance teams to stall the stone army. Naruto, Sakura, Lee and Neji are sent to guard Shion and deliver her to the shrine where Mōryō's body is kept. They fend off Shion's four would-be assassins, and, afterwards, Shion prophesies Naruto's upcoming death. Shion's total acceptance of "fate", as well as her selfish attitude, provokes Naruto into antagonizing her. As they head for the shrine, they are again ambushed by the assassins and, ultimately, Shion is killed.
This turns out to be a ruse: the dead "Shion" is actually her servant, Taruho, acting as a decoy, via Shadow Mirror Body Transfer Jutsu. After Neji orders Naruto to escort Shion to the temple alone, Shion explains that her predictions work by using others' lives to protect her own. Naruto insists that he will not die, and likewise will keep Shion safe.
With teamwork, Sakura, Lee and Neji defeat the assassins, and at the mountain temple where Mōryō's body is kept, Naruto and Shion find the stone army waiting. Naruto holds the army back while Shion heads inside to begin the sealing ritual. Yomi is already inside, and tricks Shion into beginning the technique with him inside the barrier, allowing Mōryō's spirit to reunite with his body. With the stone army being destroyed by Kakashi, Shikamaru, Guy and Temari, Naruto comes to rescue her. About to see her prediction of his death (the opening scene) come true, Shion uses her power to change Naruto's fate. She is able to tap into her true powers, intending to kill herself and Mōryō to save Naruto (with whom, she has developed feelings for). Naruto stops her seconds before her death, and creates a gigantic Rasengan(Chō Chakra Rasengan [literally: Super Chakra Spiraling Sphere]) by combining Shion's chakra with his. Naruto drives the Rasengan into Mōryō and obliterates it.
After the ending credits, Naruto asks Shion what she intends to do now. She replies that Mōryō was a demon created by the dark thoughts of men, and that there is bound to be another Mōryō someday. Because of this, she says that she must continue the line of priestesses that will suppress demons like Mōryō. Shion then asks Naruto if he will help her (a double entendre asking if he will be the father of her child), much to the shock of Sakura, Kakashi, and Lee. Naruto, clueless as usual, agrees without realizing the second meaning of her question.
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