Horus' father, on his deathbed, reveals that their family came from a northern seaside village, which was devastated by the terrifying ice devil Grunwald, leaving them the only survivors.

In the battle that follows, Horus and Koro chase the wolves to a deserted village, where he meets a mysterious young girl named Hilda.

With her true identity revealed, Hilda reluctantly attacks Horus, who falls into a chasm and becomes trapped in an enchanted wood, where he is haunted by visions of the villagers and his father.

Grunwald then sends Hilda, against her wishes, to kill Horus, and makes his own attack on the village, together with his wolves and a giant ice mammoth.

Horus is able to escape from the enchanted forest when he realizes that the sword must be reforged as a collective effort and that the villagers must unite in order to defeat Grunwald.

After a brief fight with Hilda, who is thoroughly remorseful about her involvement in Grunwald's plan, Horus rejoins the villagers in their battle and uses the raging fires they ignited in their defense to reforge the sword.

The film shows a place where the people are able to shake off oppressive forces and derive pleasure from their communal efforts such as subsistence fishing.

[9] As quoted in The Encyclopedia of Japanese Pop Culture by Mark Schilling, a reviewer for Hakubunkan's monthly magazine Taiyō (太陽, lit.

Sun) commented, in 1968, "In one corner of the world there now exists a commercial animation that has surpassed Disney and started to make rapid advances", after seeing Horus and The Jungle Book.

[10] Helen McCarthy, in her book Hayao Miyazaki; Master of Japanese Animation, notes that the film had only a brief theatrical release despite its critical and popular success.

McCarthy notes that Yasuji Mori's "clean and simple character design" for Hilda "allowed for considerable emotional depth and flexibility" and she observed that this style remained a powerful influence on the works of Takahata and Miyazaki throughout their animation careers.

The sequence in which Horus fights the giant fish in particular has been referenced as a pivotal moment in the evolution of the medium and as a scene which had a profound impact on the animation works later produced at Studio Ghibli.

[12][13] Justin Sevakis, writing a retrospective review for Anime News Network in March 2014, noted that the film was a financial flop but almost immediately gained a following among young people.

On January 21, 2015, the upscaled Blu-ray Disc edition of the movie was included in Walt Disney Studios Japan's The Complete Works of Isao Takahata boxset, which contains ten of the director's films.