Iwate Prefecture in northeastern Japan is the setting for The Legends of Tono (Tōno Monogatari), a unique collection of regional folk tales, gathered in the early 20th Century by Kunio Yanagita. The tales manifest and explain invisible forces and malevolent events which shape the psycho-cultural dimensions of Japanese indigenous beliefs and folk faith.

Inspired by The Legends of Tono, Horse/Kappa/House records the surrounding landscape in a number of small villages throughout Iwante Prefecture in order to create a cinematic space which echoes by implication and association, the external and unseen world in the environment. The film embodies the idea so eloquently stated by noted historian, Mr. Umehara Takeshi, that "all living things—animals and plants, as well as mountains, rivers, and other natural phenomena have spirits and that these spirits are constantly moving back and forth between Heaven and this world, forming the basis of the Japanese ethos."