Long ago, the village had a major connection to Hinamizawa for farming purposes, but after the introduction of advanced technology, the people moved to Hinamizawa to be closer to the city. Behind the mountains near Yagouchi is an abandoned quarry, which is called the "hole". According to Sonozaki Mion, there was an accident in the quarry where a young boy fell into the "hole" and never came back home. His father went to look for the boy, but on the way, the father's car flipped and crashed into the river below. It is revealed at the end of the OVA that the quarry is actually the Yamainu's base and storehouse for the poisonous gases that would be released once Plan 34 was initiated. Yagouchi is located in a forest area deep within the mountains near the village of Hinamizawa.
In Nekogoroshi-hen, The Club has to walk around Hinamizawa in embarrassing outfits as a punishment game. To avoid the attention from the locals, they decide to walk to Yagouchi. Most of the episode takes place in the abandoned village, as The Club discusses whether to move deeper into the ghost town to explore the quarry, or turn back.