After defeating every racing team in the prefecture, everything comes down to one last race. Takumi Fujiwara has never lost a race, but when his opponent is also using an AE86, it turns into a battle of the AE86. Will Project D succeed in the final and most difficult race of Initial D?

The protagonist, Takumi Fujiwara, is a gas station attendant working with his friend Itsuki to buy a car, which they plan to drift on the twisting roads surrounding nearby Mount Akina. Unbeknownst to his colleagues, Takumi moonlights as a tofu delivery driver for his father's store before sunrise each morning, passively building an impressive amount of skill behind the wheel of the family car, an aging Toyota Sprinter Trueno.

Shortly after the story begins, the RedSuns, an amateur racing team from Akagi Prefecture, challenge the local Speedstars team to a set of races on Mount Akina. Dispirited after watching the RedSuns' superior performance during a practice run, the Speedstars expect to lose. Later that night, the RedSuns' #2 driver, heading home after the last practice run, is defeated soundly by a mysterious Sprinter Trueno, despite driving a much more powerful car. An investigation into the identity of the driver leads to Bunta Fujiwara, Takumi's father. The Speedstars beg Bunta to help them defeat the RedSuns, and he initially refuses, later relenting to "maybe" show up at the race. At the same time, Takumi asks Bunta if he can borrow the car for a day to take a trip to the beach with a potential girlfriend, and Bunta seizes the moment by granting permission (plus a full tank of fuel) on the condition that Takumi defeats the RedSuns driver.

On the night of the race, the Trueno does not show up, and the Speedstars enlist a backup driver for the first run. At the last moment before the race starts, the Trueno arrives. Takumi steps out of the car to the bewilderment of the Speedstars, who were expecting Bunta. He easily defeats the RedSuns driver by utilizing a dangerous technique on the mountain road's hairpin corners.

The RedSuns' embarrassing defeat sets up the plot for the rest of the series: drivers from neighboring prefectures come to challenge Takumi and the "Legendary Eight-Six of Akina" and thus prove themselves as racers. Eventually, the plot moves away from Mount Akina as Takumi becomes bored with racing solely on that road. He joins an experimental racing team formed by the disbanded RedSuns and challenges more difficult opponents on their home courses in the pursuit of his dream to be "the fastest driver out there".