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|Notable inhabitants||Dr. Redbeard|
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Chibiterasu's adventure begins in Yakushi Village as Issun travels there to spread the word of Amaterasu and her great deeds. However, while there, he is ambushed by Imps and the small wolf pup Chibiterasu is sent down from the Celestial Plain to find the cause of the returning evil. Chibiterasu and Issun then travel together back to Kamiki Village to find Sakuya who may give them some information.
During Chibiterasu's first departure from the village, he receives a map from an old man, and he shows people the map to gain praise and help Yakushi Village become more populated.Another important event in Yakushi Village is that Ayame, a poor little girl who is ill due to a disease that threatens her life, only has one more year to live. Ayame moved to Yakushi Village to find the cure to her sickness from Dr. Redbeard, but was unsuccessful. In Sei'an City, Chibiterasu meets Dr. Redbeard's brother, Dr. Bluebeard. Dr. Bluebeard gives Chibiterasu and Kagu a free pack of herbs for stopping a boy with a sick mother from stealing the medicine to cure his mother, they receive the herbs after they have aged long enough to use to give to his brother to create the ultimate medicine. Chibiterasu takes the herbs to Dr. Redbeard in Yakushi Village and the ultimate medicine cures Ayame.
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- Yakushi (「薬師」?), is short for Kusurishi Nyorai (「薬師如来」?; Healing Buddha), the Japanese name of the medicine/healer Buddha, Bhaisajyaguru (Sanskrit: Medicine user).
- At one point, Chibiterasu and Kuni find a wounded crane at the entrance to Agata Forest. They can heal it after obtaining medicine from Dr. Redbeard during the Cherry Bomb quest. Later, they find a woman in Yakushi Village who claims to have known the crane and has prepared a 'surprise' for Chibiterasu and his partner, and they must not enter until she is ready. If the room is entered, the crane, implied to be the woman, is found and flies away. This is inspired by a legend about a man who helped a wounded crane. Later, a woman appeared and helped the man by making clothes. However, he discovered the crane was actually the woman and she flew away.