In Southeast Asia, armed guerillas storm a party being hosted by a major Japanese trading company. They kidnap Eri Enomoto (Rika Uesugi), the director's daughter, and demand a huge ransom. But company infighting stalls plans to comply with the kidnappers, and Eri's father collapses from the strain. When Eri's childhood friend, Miki (Natsuki Katoh), learns of the kidnapping and the company's reluctance to save her friend, she decides to try and rescue Eri on her own.

Yakuza Zombie opens with an introduction to a mysterious Yakuza graveyard deep in the forest, and a story of the baddest Yakuza of them all, Naruo Ryuuji (shown in cut scenes played by Ozawa Hitoshi). Naruo Ryuuji was a fearless killer who eventually got into heroin and, exactly like Ishimatsu Rikuo in Takashi Miike's Graveyard of Honor, eventually leaps to his death from the top of a prison, claiming he'll be back. I'm assuming this is a reference to real life crazy Yakuza Ishikawa Rikio, whom the original Graveyard of Honor was based on. It's established that the corpse of the fierce Yakuza Ryuuji is buried in the graveyard beneath a marker with the Japanese characters "Jingi" (Honor), and then we are taken to the modern day.