Grass for His Pillow alternates between following Takeo Otori and Kaede Shirikawa. When following Takeo, it is in first person, but for Kaede it is third. Takeo has left Kaede, despite being madly in love with her, because he promised the Tribe he would join them if they helped him in the assassination attempt at the end of the first book. His training is cruel and difficult, but Takeo is able to refine his already impressive skills even more. During this time, he develops a sexual relationship with Yuki, though he does not forget his love for Kaede.

He is despised by most around him, and eventually Yuki leaves as well. We later learn this is because she is pregnant. The Tribe learns that Shigeru (Takeo's adopted father) knew much about the Tribe, so Takeo is back to Shigeru's house to find what documents he kept on the Tribe. On the way, he learns that he is to be killed if he fails or hesitates in this mission. In the end, he decides to leave the Tribe. He is sentenced to death as a result and so he must flee.

He fleets to the temple where Shigeru is buried. On the way, he hears a prophecy that he must fight 5 battles, 4 to win and 1 to lose in order to conquer the land. He also learns that only his son has the ability to kill him. There, he is safe and he spends his winter training and raising an army. He learns Kaede is still alive, though may be married soon. He plans to find her, marry her, then get Arai's help to exact revenge against Shigeru's uncles for their part in his death.

Meanwhile, Kaede returns to her home, but she is pregnant with Takeo's child. She pretends she married Shigeru in secret. Her father teaches her to read and write like a man, and she plans to take over his lands plus Maruyama. When her father discovers the child is not Shigeru's, he kills himself. Kaede hides the truth and claims he wished her to take over the Shirikawa domain. She miscarries, and almost dies as a result. When she recovers, she begins to build her own army. She plays along with a neighboring Lord's (Fuijiwara) interest in her for the sake of food and money. He wants to marry her, but she has no interest in marrying anyone but Takeo.

She also spends her winter learning, under Fujiwara, with plans in the Spring to go to the temple where Takeo is thought to be, then on to Inuyama and Arai to seek his helping in staking her claim in Maruyama.

Spring comes and Takeo and Kaede meet at the temple, where against the advice of friends, they marry one another (they should have sought permission first.) The book ends with their marriage, and a restating of the battles to come.