Kazuko is trapped inside her house, unable to leave or she will be killed. She is starving to death, and the creature waiting for her uses Kazuko's own voice to try to lure her outside.
A month previously, Kazuko's best friend Terumi Fujino had killed herself by hanging herself from a telephone wire with a metal noose. Terumi was a popular celebrity who seemingly had no reason to commit suicide. Her boyfriend Shiroishi, another classmate of Kazuko and Terumi, is blamed by fans for her death and starts to feel he is responsible because he had nagged her about her career.
Terumi's death inspires many copycat suicides among her fans, and others begin to report that they witnessed her ghost in the form of a giant floating head in the sky. Only her fans have ever seen the ghost, and the "ghost mania" soon spreads across Japan after the head is caught on film. Shiroishi tells Kazuko that every night the head floats into his garden, staring at him accusingly. Kazuko isn't sure what to believe but one night Shiroishi tells her that the head is floating over the town. Kazuko goes out into the streets and sees the head for herself.
The head appears and lures Shiroishi into climbing a tree, where he hangs himself through a metal noose placed there. His head detaches from his body and grows into a giant balloon like Terumi's, whereupon it floats into the sky and begins kissing her. When Kazuko tries to go to the police, Shiroishi's body has disappeared. At school, she tells her friends her theory that Terumi, like Shiroishi, was lured into hanging herself by one of the heads. They don't believe her but then balloons with the faces of Kazuko's friends come down. They have metal nooses attached, which catch and hang the girls. Kazuko and her friend Chiharu hide in an alleyway. A man shoots at Chiharu's balloon and destroys it, but this causes Chiharu's own head to explode.
Balloons have now appeared for everyone in Tokyo. Kazuko's father is caught by the balloons when he tries to go to work. Her brother Yousuke goes out to get food for the family, promising to defend himself with an umbrella. He fights off the head that comes to attack him, and disappears. Soon, everyone has been caught by the balloons and their corpses dangle in the sky including Kazuko's mother when she went to look for Yousuke. Kazuko is trapped alone inside the house.
Kazuko is eventually tricked into opening the window when she hears Yousuke calling that he has arrived with food. She opens the window to see that he is hanging from his own balloon; Kazuko's is next to it.
In addition there is a short 6 page side story to The Hanging Balloons which was made available exclusively to the attending guest at the Masters of Horror (Junji Ito's) "Horror Aesthetic Experience Exhibition" in December 4, 2015 to February 28, 2016.