In the future, mankind can no longer live on the ground due to intense radiation, both from the sun and from an abandoned nuclear plant. One day, a group of special police raided a religious cult compound, and after a fierce firefight two policemen found a winged mutant girl, with chains on her arms, barely alive. However, government scientists dressed in hazardous material suits immediately intervened and brought her back to a research facility. Realizing they were merely transferring her from one prison to another, those two policemen formulated a daring plan to set her free once and for all.

Xiao-Bai, a white snake demon, is sent on a mission to assassinate the Emperor's Taoist advisor, who has been killing snakes en masse in order to achieve immortality and curry the Emperor's favor. Xiao-Bai, however, is attacked by the advisor's lackeys before she can reach him and is subsequently defeated. Luckily, the demonic hairpin she was granted by the Snake Mother is able to save her life at the cost of her memories. Xiao-Bai awakens in the Snake-catcher village, unaware that she is actually a demon or that she is surrounded by her sworn enemies. She meets Xu Xuan, the man who saved her, and is charmed by him. The two set out on a journey to discover who Xiao-Bai is, and learn the secret of her demonic hairpin. The pair is pursued by Xiao-Qing, Xiao-Bai's sister, who has sworn to the Snake Mother to retrieve Xiao-Bai within three days or die trying. As Taoists, demons, and humans collide, a tale of forbidden romance unfolds.

A young boy silently sketches out the forms of the horrors that dwell in his mind. During this adventure into the occult and mysterious, he tells tales that involve dreams of a person with a muscular arm that you must not look at, a hospital with a room that holds a grim secret, and a visit to an eerily silent taxidermy museum. These tales and more are compiled in Yami Shibai 3. Presented in an art style similar to kamishibai storytelling, this horror series stays true to the gruesome and creepy trend that is prominent in Yami Shibai and Yami Shibai 2nd Season. [Written by MAL Rewrite]