The story is narrated by a psychiatric patient who speaks about his experiences in a country of Kappa. It is a satire of corruption in Japanese society. Akutagawa took his own life the year the novel appeared, partially out of fear that he was developing mental illness. It is seen as his masterpiece and the anniversary of his death, "Kappaki" (河童忌), 24 July, is named after this novel.
A psychiatric patient has lost his way and arrives at the country of Kappa. He is treated as a special guest and talks with Kappas of many occupations. Geeru, a radical capitalist, states that the unemployed labourers are killed by gas and their flesh is provided for food. The patient is astonished, but Geeru argues that because the poorest women survive by prostitution, the patient's opposition is sentimental. Kappa's national characteristics are materialism and nihilisticrealism. The babies of Kappa control their destiny. While in the womb, the fetus can refuse life as a Kappa and be aborted. The Maggu, a philosopher writes aphorism, "The words of fool" one of which says that "a fool always considers others fools". The Tokku, the sceptical poet Kappa committed suicide and appears as a ghost by necromancy through the person of Madan Hobbu. Tokku is concerned about his fame after his death, although he admires the writers and philosophers who died by suicide, such as Heinrich von Kleist and Otto Weininger also esteems Michel de Montaigne who justified voluntary death but dislikes Arthur Schopenhauer, pessimist who had not committed suicide. As the patient returns to the real world, he muses that Kappa was clean and superior to human society and becomes a misanthrope.