Similar to the plot of the original Yakuza, the game centers around yakuza lieutenant Kazuma Kiryu , who takes the blame up for the murder of his patriarch Sohei Dojima, committed by his sworn brother and best friend Akira Nishikiyama , spending ten years in prison before being granted parole. A free man, Kiryu discovers that Nishikiyama is now a powerful but cold-hearted yakuza boss, his childhood friend and girlfriend Yumi Sawamura ) has gone missing, and everyone is searching for ten billion yen that was stolen from his former organization, the Tojo Clan. As war erupts throughout the streets of Kamurocho between many different factions (including government agents and the Triad), Kiryu decides to find Yumi and the missing money, and protect Haruka a mysterious young girl whom everyone seems to be after. Eventually, a remorseful Nishikiyama sacrifices himself to kill Haruka's father, Kyohei Jingu who was a corrupt politician bent on destroying the Tojo and his loved ones, while Yumi died in Kiryu's arms from a gunshot wound. Rather than give in to despair and allow himself to be arrested, Kiryu leaves the Tojo and becomes Haruka's adoptive father.

Kiwami's story also introduces two new plot lines