After arriving here Chibiterasu and Kuni are prompted to look around and talk with the demons, who are apparently all in high spirits due to an upcoming tournament. In order to proceed further through the market the pair has to solve to small quests given to them by two guards, the first being to obtain and deliver a pair of Fire Eyes and the second to obtain three password phrases. After completing these quests, the pair can access the arena and find out that the prize for the tournament is the recently met and afterwards caught by demons is the mermaid Nanami. Chibiterasu then guilts Kuni into participating in the tournament, eventually winning it and thus "winning" Nanami. However, before the trio can make its escape their cover is blown and they have to face the master of the demon market, the Witch Queen. After defeating her, Kuni stays behind to cover Chibiterasu and Nanami's escape at first before joining them right before leaving the area.
The demon market is visited again when Kurow and Chibiterasu return to look for Kurow's missing wings. They encounter a green imp that has the wings and fought him for it, which they succeed. However, one of the feathers were missing on the wings, and the two heroes go deeper into the market to search for it. They enter the tournament arena where a fuming Witch Queen was nursing her wounds from the previous fight with Chibiterasu and Kuni. Just when they receive the missing feather and display Chibiterasu's new-found power to use the wind, their cover is blown. Recognizing Chibiterasu and mistaking Kurow as Kuni, the Witch Queen becomes enraged and aims to kills them both as revenge for her humiliation. The two heroes fled through the market's tunnels with the Witch Queen in hot pursuit. They narrowly escaped when Kurow carried Chibiterasu towards the exit above, leaving the Witch Queen to slam her head against the wall while trying to get them and knocked herself out to add further injuries.
- Float: In the corner to the right of the staircase in the second area of the Demon market, requiring Rejuvenation to restore the broken floor around the treasure chest to gain access to it.
- Hook: In the first area of the Demon Market, there is a tower in the center, right before the gate. It will be inaccessible on the first visit, but on the second visit, Vine can be used on the Konohana Blossom on top of the tower.
- Set 2 piece #3: At the entrance.
- Set 2 piece #4: The first area, in the long tunnel at the end, hidden behind a wall to the left, exposed by a Cherry Bomb.