In a rocky area on the outskirts of Tokyo, there is a large house, a mansion of traditional design that hosts many malevolent spirits due to its dark history. The story is, at this point, best known to video game fans in the U.S. because a video game Fatal Frame was created based on the tale.
Legend holds that the Himuro family had a gruesome responsibility - every 50 years they had to perform an ancient and occult Shinto ritual that involved raising a woman in secret (to prevent her from forming attachments to others) and, late in the year, brought to an elemental seal from which evil forces might enter the world where each limb and her neck were tied to oxen who then pulled the woman apart.
The last woman to be killed, sometime within the last 80 years, somehow came into contact with a young man, with whom she fell in love. Her feelings for the young man essentially negated the sacrifice, and so the members of the Himuro family who were responsible for the ritual became distraught. Taking a traditional sword, the patriarch murdered his entire family, feeling their death by the sword was preferable to the evil that he believed was coming.
Since then, people have reported a wide variety of weird happenings at or near the house. Apparitions of family members have been seen both at night and in broad daylight. Bloody hand prints and sprays of blood, as if from a drenched sword, mysteriously appear on the walls. People who enter the house are occasionally found dead, with rope marks on their arms and legs indicating that they had been bound and pulled.
In addition, there are three smaller houses on the same property that had some connection to the ritual. There are reputed to be tunnels under the houses that connect them to each other and the mansion, but it is not known who built these tunnels.
A few photos have been found on the internet that may be from this house, but nobody knows for certain.
Commentary: A short while back, I began looking into ghost stories in Japan. I kept coming across references to Himuro Mansion, and the impression that I got was that it was essentially the Japanese equivalent of the Borley Rectory, except for one thing: while the location of most allegedly haunted houses is known, nobody knew where Himuro Mansion was. Also, the story of how the mansion came to be haunted seemed so over the top that it struck me as obviously false. Add to that the fact that the story is said to have inspired the video game Fatal Frame, and I was suspicious as to the nature of this story. Still, I know little enough about Japanese culture that I though I should look into it further, and that's how I eventually began stumbling across the last couple of bits of information that made the whole thing clear.
The tale behind this haunted house story is an interesting one. There is no Himuro Mansion. Himuro is, in fact, a fairly normal Japanese name (think "Smith Mansion"), and the story is not one likely to be known by many Japanese people. This is an American urban legend about Japan, not a Japanese one. And what's better, it was a consciously created urban legend!
The game Fatal Frame was originally designed and released in Japan, and following it's Japanese release, it was prepared for a North American release. It is not clear when the story of the haunted mansion began, but by the time of its North American release, the tagline "Based on a true story"* was added to the title, and the claim that the game was based on an actual story concerning a haunted house in Japan was circulated. The presence of the internet, probably the best tool for spreading false information and claiming rumor as true ever, made it easy to spread the story, and many people in both the video gamer and paranormal enthusiast communities shared the tale of the haunted house with others. Whether the alleged photos of the house come from the game company or from outside hoaxsters on the internet is not clear.
So, it appears possible that the story primarily exists in North America, and only exists because it was part of a marketing campaign for a video game. As a result, we now appear to have an urban legend about events that allegedly happened in another country, but the legend is primarily in circulation in the U.S. This has to be one of the most convoluted marketing/hoax-based urban legends ever. And I really dig it.
Edit to add: As you can see if you look down in the comments section of this site, there are a whole lot of people who really want this story to be true, which makes this entry the most commented-on of all of those that I have posted to this site. The comments section is something of a microcosm of the sorts of weird-ass arguments that people make regarding claims that are demonstrated false, but that they wish to keep believing: you have the people who are unwilling to do their own background research accusing me of not having done mine, you have the people making frankly racist assertions regarding the "superstitious" and "secretive" people of Asia, you have the pseudo-profound ramblings of people who are trying to claim that the fact that this house has never been found is somehow evidence of it's existence, the people who produce weird-ass stories about alleged visits to the house, and you have the people claiming that there is some sort of vast cover-up that would have to include Google, several governments, and more than a few people and companies involved in software development. It is deeply, deeply strange.
For most of the people posting here who are claiming that the story is true, it seems to be partially a devotion to the game (which I am told is a fantastic game, though I have personally not played it) and partially a desire for a supernatural story to be true. Regardless, this particular entry seems to get the passions up like nothing else on here...likely this is at least partially because the fact that this is tied in to a video game gives the players of the game a feeling that they have somehow experienced the events, and therefore a deeper investments than they otherwise might have. I suspect also that the culturally pornographic view that many have regarding the "exotic" nature of Japan makes them invest this story with more meaning than a ghost story set in, for example, New Jersey. Regardless, it is interesting to me that this one entry gets so much attention when, frankly, it's not even one of the better entries on this site.
*What is it with people routinely falling for this line? I have seen otherwise sane, rational people fall for really tall tales because they were supposedly "based on a true story". My favorite example, though, is that a cousin of mine was convinced that the events depicted in Return of the Living Dead really happened because the opening screen of the film had these words emblazoned across it.
Sources: Fatal Frame Wiki, Wikipedia, Internet, Internet, The Illustrious Internet