This cuddly forest spirit has become the defining logo and trademark of Studio Ghibli in most (if not all) of its advertisements and merchandises. Totoro appears in My Neighbor Totoro (Tonari no Totoro), a 1988 Japanese animated fantasy film written and directed by Hayao Miyazaki.
The story revolves around the two daughters of a professor who recently moved to an old house in the rural areas of Japan and their interactions with the friendly spirits in the woods. The two daughters Satsuki and Mei together with their father Professor Tatsuo moved in to be closer to the hospital where their mother Yasuko is recovering from a long-term illness.
Mei discovered tiny rabbit-like creatures, followed them which leads to discovering the bigger version Totoro. Totoro and his friends are furry and look like stuffed animals. Totoro is a fuzzy bluish gray creature that is kind of mysterious, a little bit scary(maybe?), but 100% adorable.
Totoro helps Satsuki find Mei when Mei got lost going to the hospital to visit their mother. Mei walks towards the hospital to bring corn for their mother. When Satsuki found out Mei's disappearance, the whole neighbourhood searched for her. Satsuki felt hopeless and asked help from Totoro to find her little sister. Delighted to help, Totoro then called for the Catbus (Neko Basu). Neko Basu then brought Satsuki to the place where Mei sits.
The animated film depicts Totoro as a good spirit of the woods who is willing to help in times of trouble. Totoro does not talk, and yet you can still understand what the lovable furry creature is thinking with his endearing actions.
These adorable and lovable features of the character are the main reason for its popularity.
Image Source : Studio Ghibli Website

good to know, as I no longer watch cartoons
Try to watch the animated films of Studio Ghibli productions. You're gonna like it. :)
@originalworks
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i have a toy totoro at home hehe but I haven't watched it before. Are you a fan of studio ghibli productions?
You should watch it. I'm trying to collect Totoro stuffs. Hehehe. The film is so light and very nostalgic, it will take you back to your childhood. Yes, I'm a a fan of studio ghibli productions. Waaah can't wait for the rumored studio ghibli park in Japan. :D
I love studio Ghibli I have a collection on on my hard drive. I even named one of my shih tzu Marnie from "when marnie was there " beautiful film.
Wow! That's awesome. I'm collecting Totoro stuffs, one of my favorite is my giant size Totoro stuffed toy. I'm quiet sad about it, coz I can't bring it with me in Japan. -_-