After walking her grandmother to the train station, young Mimiko is left home alone. However when she returns home, a giant panda cub is resting on the porch. Mimiko befriends the panda and later the panda's father, and they begin to live together as an adopted family. However living indoors isn't easy for giant pandas, and to make matters worse, several townspeople want to "save" Mimiko from her adopted panda family!
Satsuki, her younger sister Mei and their father have just moved to their new home in the countryside, where grand adventures await them. One day while playing outside in the garden Mei encounters a small creature and decides to follow it. After chasing it through the bushes Mei eventually finds herself at the base of a large Camphor tree and as she drops through a hole in its roots, she lands on the stomach of a large, sleeping forest spirit named Totoro. The two sisters befriend the gentle spirit and are soon introduced to a world more fantastical than they could ever imagine, from playing with soot spirits to meeting a Catbus, to flying through the air and even making the trees grow. However when Mei disappears, Satsuki must call on the help of her new friends if she wants any hope of being able to find her sister...
My Neighbor Totoro is a more sophisticated version of Panda. The female protagonists of both anime have similar mannerisms and attitude. They are both very possibly based off the same person by Miyazaki. The main "Panda" is the basis for which the character Totoro was made. There are similar family matters in both works such as being far away from a loved one.
Totoro steps it up in both animation and writing. The girl, Mei, is one of Miyazaki's most believable young characters. Her spunk and playfulness is rooted in Panda. Even if someone found Panda insufferable, they will find Totoro 100% more entertaining.
The animation and character designs are very similar, and overall has the same nostalgic ghibli feel.