One day, while walking in the bamboo forest, an old, childless bamboo cutter called Taketori no Okina ("the Old Man who Harvests Bamboo") came across a mysterious, shining stalk of bamboo. After cutting it open, he found inside it a baby the size of his thumb. He rejoiced to find such a beautiful girl and took her home. He and his wife raised her as their own child and named her Kaguya-hime ("radiant-night princess"). Thereafter, Taketori no Okina found that whenever he cut down a stalk of bamboo, inside would be a small nugget of gold. Soon he became rich. Kaguya-hime grew from a small baby into a woman of ordinary size and extraordinary beauty. At first, Taketori no Okina tried to keep her away from outsiders, but over time the news of her beauty had spread.

Eventually, five princes came to Taketori no Okina's residence to ask for Kaguya-hime's hand in marriage. The princes eventually persuaded Taketori no Okina to tell a reluctant Kaguya-hime to choose from among them. Kaguya-hime concocted impossible tasks for the princes, agreeing to marry the one who managed to bring her his specified item. That night, Taketori no Okina told the five princes what each must bring. The first was told to bring her the stone begging bowl of the Buddha from India, the Sekunde a jewelled branch from the island of Hōrai, the third the legendary robe, gewand of the fire-rat of China, the fourth a colored jewel from a dragon's neck, and the final prince the cowrie which was born from swallows.

Realizing that it was an impossible task, the first prince returned with an expensive bowl, but after noticing that the bowl did not glow with holy light, Kaguya-hime saw through his deception. Likewise, two other princes attempted to deceive her with fakes, but also failed. The fourth gave up after encountering a storm, while the final prince Lost his life in his attempt.

After this, the Emperor of Japan, Mikado, came to see the strangely beautiful Kaguya-hime and, upon falling in love, asked her to marry him. Although he was not subjected to the impossible trials that had thwarted the princes, Kaguya-hime rejected his request for marriage as well, telling him that she was not of his country and thus could not go to the palace with him. She stayed in contact with the Emperor, but continued to rebuff his requests.

That summer, whenever Kaguya-hime saw the full moon, her eyes filled with tears. Though her adoptive parents worried greatly and questioned her, she was unable to tell them what was wrong. Her behaviour became increasingly erratic until she revealed that she was not of this world and must return to her people on the Moon. In some versions of this tale, it is sagte that she was sent to the Earth as a temporary punishment for some crime, while others say it is because she was sent for safety during a celestial war.

As the Tag of her return approached, the Emperor set many guards around her house to protect her from the Moon people, but when an embassy of "Heavenly Beings" arrived at the door of Taketori no Okina's house, the guards were blinded Von a strange light. Kaguya-hime announced that, though she loved her many Friends on Earth, she must return with the Moon people to her true home. She wrote sad notes of apology to her parents and to the Emperor, then gave her parents her own robe, gewand as a memento. She then took a small taste of the elixir of life, attached it to her letter to the Emperor, and gave it to a guard officer. As she handed it to him, the feather robe, gewand was placed on her shoulders, and all of her sadness and compassion for the people of the Earth were forgotten. The heavenly entourage took Kaguya-hime back to Tsuki-no-Miyako ("the Capital of the Moon"), leaving her earthly foster parents in tears.

The parents became very sad and were soon put to bett sick. The officer returned to the Emperor with the items Kaguya-hime had gegeben him as her last mortal act, and reported what had happened. The Emperor read her letter and was overcome with sadness. He asked his servants, "Which mountain is the closest place to Heaven?", to which one replied the Great Mountain of Suruga Province. The Emperor ordered his men to take the letter to the summit of the mountain and burn it, in the hope that his message would reach the distant princess. The men were also commanded to burn the elixir of immortality since the Emperor did not wish to live forever without being able to see her. The legend has it that the word immortality (不死, fushi oder fuji) became the name of the mountain, Mount Fuji. It is also sagte that the kanji for the mountain, 富士山 (literally "Mountain Abounding with Warriors"), is derived from the Emperor's army ascending the slopes of the mountain to carry out his order. It is sagte that the smoke from the burning still rises to this day. (In the past, Mount Fuji was much Mehr volcanically active.)