Four years ago, the city of Mitakihara was struck by a mysterious disaster that reduced a large part of the city to rubble and turned the once prosperous megalopolis into a cesspool of the uncanny and the unscrupulous. While criminal syndicates and street gangs struggle for power in the city’s impoverished districts, the army patrols the streets with an ever increasing presence, while the city keeps being plagued by mysterious accidents and disappearances.
Half a week ago, Hanako Sasaki would have killed herself — if it weren’t for Kyubey, a strange creature that saved her life by offering her a “contract” she’d never even thought possible. Any wish she had could become reality, the mysterious creature claimed, as long as Hanako would be willing to become a Puella Magi, a magically powered warrior sworn to protect the city of Mitakihara from otherworldly monstrosities known as Witches. Feeding on despair and mankind’s worst impulses, the Witches have been steering the world to ruin from the shadows since time immemorial. Yet as of late, their presence in Mitakihara has been growing at a staggering rate, leaving Kyubey desperate for reinforcements in his struggle against them.
Though obviously willing, Hanako finds herself incapable of making an overly eager decision, ultimately asking Kyubey to allow her some time to consider a wish worth fighting for. Throughout her first days back at school after a prolonged absence, Hanako befriends Shinju Hayama, a thrill-seeking transfer student living at the city’s military base. Furthermore, she also becomes acquainted with Koharu Shirahara, a troubled member of the school’s newspaper club, when the former catches Hanako during one of her rendezvous with Kyubey. Desperate for a scoop after an anonymous source nearly fooled her into publishing misinformation that would tarnish the school’s reputation, Koharu presses Hanako for more info on the creature, which she believes to have seen on the night of her mother’s disappearance — the very same night of the disaster four years ago.
Because of Koharu’s insatiable curiosity, Hanako soon finds her to be an excellent conversation partner to discuss her doubts regarding Kyubey’s contract, the two are attacked by a Witch and eventually saved by a Puella Magi who introduces herself as Kohaku Hayama — Shinju’s older sister. During the ensuing conversation, Hanako and Koharu learn a terrifying secret about their classmate: Shinju is actually supposed to be dead, and was brought back to life because her sister wished for it when she made a contract with Kyubey. Meanwhile, Kyubey continues to offer said contract to various girls across the city. When he approaches a girl named Rui Tomatsu, however, the girl is dismissive, accusing the creature of having violated some sort of agreement between the two after she saw him making the same offer to Hanako. Claiming responsibility for the growing number of new Puellae in the city, Rui leaves, but not after threatening Kyubey to leave her alone.
While Koharu recruits Shinju to track down the anonymous source that set her up, Rui begins harassing Hanako at school. When Hanako confesses to her new friends that Rui might be bullying her because of their shared ties to Kyubey, Koharu manages to convince her to make a contract with Kyubey and wish for the confidence to stand up to Rui. When Hanako expresses her fear that wishing way her depression might fundamentally change who she is, however, Koharu suggests she wishes not for the knowledge to solve her depression, but the courage to face it. Haunted by this proposal, Hanako reveals to Shinju her traumatic past — the sudden disappearance of her best friend Ueno Asaharu. Tired of being weighed down by depression despite the love of her parents and newfound friends, she finally caves to Kyubey’s demands, putting her friend’s advice into a heartfelt wish and promptly sealing her fate as a newborn Puella Magi.