Set in Japan during an unspecific year of the Edo period, Ogami Ittō, disgraced former executioner, or Kogi Kaishakunin, to the shogun, wanders the countryside, pushing a baby cart with his 3-year-old son Daigoro inside. A banner hangs off his back. "Ogami: Suiouryo technique" (Child and expertise for rent)(子を[son] 貸し[for hire] 腕 [arm|skill] 貸し[for hire] つかまつる [to serve] 水 鷗流 [Suiouryo] 拜一刀 [ogami ittô]), it says. His services are asked for in a most unexpected way, when an insane woman seizes Daigoro from the cart and proceeds to try to breastfeed the boy. Daigoro at first hesitates, but after stern look from his father, he proceeds to suckle the crazy woman's breast. The woman's mother then apologizes for her daughter's behavior and tries to give Ittō money, but the stoic ronin refuses, saying his son was hungry anyway.
As he walks in the rain, he remembers another rainy day several months earlier when his wife, Asami, was slain by three ninjas, ostensibly in revenge for Ittō's execution of a boy daimyo, but it was really part of a complicated plot by the shogun's inspector Bizen and the "Shadow" Yagyū Clan to frame Ittō for treason and take over the executioner's post.
Now a wandering assassin for hire, Ittō takes a job from a Chamberlain, to kill a rival and his gang of henchmen, who pose a threat to the chamberlain's lord. The chamberlain plans to test Ittō, but a quick slash behind his back with his Dotanuki sword dispatches the chamberlain's two men. The targets are in a remote mountain village that is home to hot-spring spa pools.
As Ittō pushes the baby cart, and Daigoro observes scenes of nature, such as a mother dog suckling one puppy, and two children singing a song and bouncing a ball, Ittō thinks back again to the time just after his wife was killed. He gave Daigoro a choice between a toy ball or the sword. If the child chose the ball, Ittō would put him to death send him to be with his mother – a better place in his opinion. But the curious child reaches for the sword – he has chosen to take the path of the ronin with his father, to live like demons at the crossroads to hell.
Eventually, Ittō reaches the hot-spring village. He finds that the rival chamberlain and his men have hired a band of ronins who have taken over the town and are raping, looting and pillaging. Ittō is forced to give up his sword and take his place as a hostage in the village.
The ronins discuss killing Ittō, but then decide to let him live if he will have sex with the town's remaining prostitute while they watch. The prostitute refuses to have any part in it, but then she's threatened by one of the men, a knife expert, and in order to save the woman, Ittō steps forward and disrobes, saying he will do the men's bidding with the woman.
The episode takes one more trip back to the past, for the dramatic beheading and blood-spurting scene in which Ittō defeats one of Yagyū Retsudo's best swordsman, with the aid of a mirror on Daigoro's forehead to reflect the sun into the swordsman's eyes.
And then there is the big showdown in the village, where it is revealed that the baby cart harbors some secrets – various edged weapons, including a spear-like naginata, which Ittō uses to take out the evil chamberlain's men, chopping one off at his knees, leaving the bloody stumps of his lower legs still standing on the ground.
One of the men has matchlock pistols, but Ittō quickly upturns the baby cart, which is revealed to be armored underneath, and when the gunman's pistols are empty, Ittō quickly leaps over the baby cart and brings his blade down on the man's forehead, splitting it in two.
Ittō leaves the village, and the prostitute hopes to follow, but Ittō makes a motion to cut the ropes on the bridge leading to town, to stop her from following, for the journey he is on is one that is for only him and Daigoro to make.Tomisaburo Wakayama as Ogami Ittō
Akihiro Tomikawa as Ogami Daigoro
Tomoko Mayama as Osen, the prostitute
Fumio Watanabe as Yagyu Bizen-no-kami
Keiko Fujita as Ogami Asami
Reiko Kasahara as Madwoman
Yunosuke Ito as Yagyū Retsudo
Lone Wolf and Cub: Sword of Vengeance was released theatrically in Japan on 15 January 1972 where it was distributed by Toho. The film was released in the United States by Toho International with English subtitles and an 83-minute running time in August 1973.