The film was released on VHS and laserdisc in the United States by Tokuma Japan Communications' US subsidiary in 1993 with the title My Friend Totoro.
Streamline Pictures produced an exclusive dub for Japan Airlines' transpacific flights in 1988. Troma Films, under their 50th St. Films banner, distributed the dub of the film co-produced by Jerry Beck. It was released on VHS and DVD by Fox Video. Troma's and Fox's rights to this version expired in 2004. The film was re-released by Disney on March 7, 2006. It features a new dub cast. This DVD release is the first version of the film in the United States to include both Japanese and English language tracks, as Fox did not have the rights to the Japanese audio track for their version.
In 1958, the Kusakabe family reunites when a university professor and his two daughters, Satsuki and Mei (approximately ten and four years old, respectively) move into an old house in rural Japan to be closer to the hospital where their mother is recovering from an unnamed, long-term illness. The daughters find that the house is inhabited by tiny animated dust creatures called susuwatari— small house spirits seen when moving from light to dark places. When the girls become comfortable in their new house and laugh with their father, the soot spirits (identified as "black soots" in early subtitles and "soot sprites" in the later English dubbed version) leave the house to drift away on the wind.
While she is playing outside one day, Mei sees two white, rabbit-like ears in the grass. She follows the ears under the house where she discovers two small magical creatures, who lead her through a briar patch and into the hollow of a large camphor tree. She meets and befriends a larger version of the same kind of spirit, which identifies itself by a series of roars that she interprets as "Totoro" (in the original Japanese dub, it stems from Mei's mispronunciation of the word for "troll"). Her father later tells her that this is the "keeper of the forest".
One rainy night, the girls are waiting for their father's bus and grow worried when he does not arrive on the bus they expect him on. As they wait, Mei eventually falls asleep on Satsuki's back and Totoro appears beside them, allowing Satsuki to see him for the first time. He only has a leaf on his head for protection against the rain, so Satsuki offers him the umbrella she had taken along for her father. Totoro is delighted at both the shelter and the sounds made upon it by falling raindrops. In return, he gives her a bundle of nuts and seeds. A bus-shaped giant cat halts at the stop, and Totoro boards it, taking the umbrella. Shortly after, their father’s bus arrives.
The girls plant the seeds. A few days later, they awaken at midnight to find Totoro and his two miniature colleagues engaged in a ceremonial around the planted nuts and seeds. The girls join in, whereupon the seeds sprout and then grow into an enormous tree. Totoro takes his colleagues and the girls for a ride on a magical flying top. In the morning, the tree is gone, but the seeds have indeed sprouted.
The girls find out that a planned visit by their mother has to be postponed because of a setback in her treatment. Satsuki takes this very hard, having reached the age where she fully understands the concept of death. Frustrated and frightened, she yells at Mei, then stomps away. Mei, believing that her mother can be cured by healthy food, sets off on foot to the hospital with an ear of corn.
Her disappearance prompts Satsuki and the neighbors to search for her; eventually, Satsuki returns in desperation to the camphor tree and pleads for Totoro's help. Delighted to be of assistance, he summons the Catbus, which carries her to where the confused Mei sits. Having rescued her, the Catbus then whisks her and Satsuki over the countryside to see their mother in the hospital. The girls perch in a tree outside of the hospital, overhearing a conversation between their parents and discovering that she has been kept in hospital by a minor cold and is otherwise doing well. They secretly leave the ear of corn on the windowsill, where it is discovered by the parents, and return home on the Catbus. When the Catbus departs, it fades away from the girls' sight.
The closing credits show Mei and Satsuki's mother returning home and feature scenes of Satsuki and Mei playing with other children, with Totoro and his friends as unseen observers.