Days after the storm, Kurouzu-cho is in ruins. Many people are left homeless, including Kirie’s family who are forced to move into the old row houses. Kirie, Mitsuo, and their mother introduce themselves to their neighbor Mr. Wakabayashi. Mr. Wakabayashi advises against talking to the other tenants, as they are squatters who like to keep to themselves. That night, Mr. Goshima finds a spiral-shaped wart on his foot. Kirie and Mitsuo are kept awake by distant howling.

Kirie talks to Mr. Wakabayashi in the morning. He tells her that the squatters are a mother and son. The son is ill and cries in pain every night, explaining the howls. As they talk, the mother emerges from her apartment. Shrouded in robes, she hangs a kimono destroyed by hundreds of holes out to dry. As the mother does so, she loses her balance and falls. Kirie goes to help her and sees the mother’s hand is covered in thorny warts. Later that afternoon, more wailing is heard from the squatters’ place. Kirie realizes it is the mother crying and runs over to help her. When Kirie enters the apartment, the mother reveals that her son has died. Kirie calls an ambulance, and doctors diagnose the squatters with an unknown skin disease.