The first episode opens with the mysterious suicide of a junior high school girl, Yomoda Chisa. She was a classmate of Iwakura Lain, a quiet, 14-year-old junior high school girl. One of the other girls in the class has been receiving e-mail messages from Chisa, and Lain discovers she also has mail from Chisa.
She explains in the mail to Lain that she just abandoned her flesh. She assures Lain that she still is alive in the 'wired' world. After getting a new 'navi' and adding a 'psyche' circuit, Lain spends more and more time in the wired. It seems that Lain has at least two personalities, and Lain's first personality is changing even now. Who is Lain? Who are the 'knights'? Can the wired influence the real world with a prophecy? Is the real world nothing but a hologram of the information in the wired?