Akai Katana takes place in a parallel world that resembles Japan's Taisho period. Here, people discovered a blood sword that takes human sacrifices to unleash its mass destructive power. The empire uses these swords and sacrificed their people to conquer other countries.
All the bloodshed and power gained through sacrificing close family members made some of the swordsmen change their stances. With new fighter planes and the powered up swords at their disposal, they fought back against the empire.