The central twist in "Ugetsu" is the revelation that the alluring Lady Wakasa and her entire opulent existence are an illusion. Genjūrō, a potter blinded by greed, is seduced by her and believes he has married into a noble family. However, a passing priest recognizes that he is bewitched by a spirit and paints protective symbols on his body to break the spell. When Lady Wakasa's spirit attempts to embrace him, she is repelled by the holy script, and her phantom mansion instantly transforms into a burned-out ruin. Genjūrō discovers that the entire Kutsuki clan, including Lady Wakasa, was killed in the ongoing war. He has been living in a ghost's dream.
The film's second, and perhaps more emotionally devastating, spoiler is the fate of Genjūrō's wife, Miyagi. After being left on the lakeshore for her safety, Miyagi and her young son attempt to survive in the war-torn countryside. In a brutal and heart-wrenching scene, she is accosted by starving, rogue samurai who stab her to death for her food, leaving her son crying on her back. The full weight of this tragedy is revealed at the film's conclusion. When Genjūrō finally returns home, broken and impoverished, he finds his house intact and Miyagi waiting for him, as if nothing has happened. They have a tender reunion where he begs for forgiveness, and she comforts him. He falls asleep peacefully. However, when he awakens the next morning, she is gone. A neighbor informs him that Miyagi was killed long ago. He realizes he spent the night with his wife's loving and forgiving ghost. This revelation underscores the film's core meaning: while his pursuit of illusion led to the destruction of his reality, the enduring power of his wife's love transcends even death to offer him a final moment of comfort and guide him toward redemption.