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The story in Jade Cocoon revolves around one young man's quest to save his village. The game's opening sees the main character Levant in a "dream world" where he meets a mysterious man and is defeated by him. Soon after a swarm of divine locusts known as the "Onibubu" attack the village from the forest. The forest is a place where the Divine Spirits are free and "Minions" roam free. The swarm fly over the village and leave many of the villagers under a spell of sleep which none of the villagers can undo. Levant is induced with his coming of age ceremony to become a "Cocoon Master", whos job it is to protect the village. Levant's father Riketz once held this position years ago but he fled the village leaving Levant and his mother alone.

Once Levant is given the title "Cocoon Master" he is wed to his betrothed, Mahbu, who lives with the village sage Garai. Levant leaves into the Beetle Forest (The first of the 4 surrounding forests) to which the village elders gave him the key, so that he may gather information on how to remove the Onibubu's spell.

Continue on to the Beetle forest once you have finished exploring town.