|Long ago, Sylvarant and Tethe'alla were united as a single world that drew strength from the Great Kharlan Tree. Divine intervention tore them apart, however, and the World Tree withered and died. It was eventually left to a boy named Lloyd Irving and his friends to restore the world to its true form. At their journey's end, a new World Tree was planted to replace the old one and to hold the two worlds together. This was the story of the Journey of Regeneration.
Together once more, the world is now entering a new era. However, its people are still faced with many problems. After the lands became one, maps were rendered useless and the climate went through many vast changes: desert towns became frozen wastelands and lakes dried up into valleys. All of this stems from an overlooked factor in the unification of the worlds: the spirit of the old Kharlan Tree, Ratatosk, still exists somewhere, and its slumber has sent the world into chaos.
However, Ratatosk is not the only problem: the people of the two worlds are starting to hate each other. The citizens of Tethe'alla look down upon the citizens of Sylvarant due to their inferior technology, and the citizens of Sylvarant fear the citizens of Tethe'alla because of their power. Two years have passed since the worlds were first merged, and the people of Sylvarant have created the Vanguard which is supposed to rise against the Church of Martel and the people of Tethe'alla.
Six months prior to the start of the game, the Church of Martel, led by the hero Lloyd Irving, attacked the Sylvaranti city Palmacosta because members of the Vanguard were meeting there. Countless innocent people died and Palmacosta was consumed in a terrible fire. This event came to be known as the "Blood Purge," a bloody massacre caused by the Church of Martel.
Emil Castagnier, a Palmacostian boy, whose parents were killed by Lloyd, is sent to Luin to live with his aunt and uncle after this traumatic incident. He suffers continual mistreatment from them, however, and he is further ostracized by the people of the city, who view Lloyd as a hero.
Emil's life takes a dramatic turn when he befriends Marta Lualdi, a girl who is being hunted by the Vanguard and the enigmatic Richter Abend alike. Determined to protect her, Emil confronts Richter and helps Marta escape with the aid of Tenebrae, a Centurion spirit who serves Ratatosk. Tenebrae states that there are other Centurions who lie in a dormant state: to restore balance to the world's environment, all of them should be awoken in order to revive Ratatosk. Emil forms a pact with Tenebrae, and in so doing becomes a Knight of Ratatosk. So it is that Emil and Marta embark on their journey of revenge and restoration.