In 1970s-era Japan, three children, Kazuma Kiryu, Akira Nishikiyama, and his younger sister, Yuko Nishikiyama, are raised together in Shintaro Kazama's Sunflower Orphanage. In the summer of 1980, Yumi Sawamura, a young girl whose parents were accidentally shot and killed during a gang's shootout, joins them in the orphanage. Following a yakuza tradition, the honorable Kazama secretly raises orphans whose parents he has directly or indirectly killed. In return, the children love him as a father and he eventually inducts the teenage Kiryu and Nishikiyama into the Dojima Family, a Tojo Clan affiliate of which he is a senior officer.

Former yakuza underling Kazuma Kiryū has recently been released from prison after a lengthy incarceration and is trying to piece his life together and distance himself from his yakuza past. Unfortunately, Kiryū's problems slowly escalate as he is pursued by a former associate, the baseball-bat-wielding psycho Gorō Majima, who has a grudge to settle with Kiryū.