Ambermoon is the second game in Thalion's never-finished Amber trilogy that was started out by Amberstar. The sequel is set more than half a century after the first game, the world of Lyramion just starting to recover from the destruction caused by the collapse of the red moon. The original protagonist is an old, dying man as the game starts out. He summons his grandchild and tells him about a vision he had, of an old friend who supposedly died more than forty years ago and warned him of a great evil rising again. He sends the youth on a quest to seek that old friend and find out what is behind that vision.

Concerning gameplay, Ambermoon is similar to its predecessor. The player initially controls only the main character, having the choice between a male and a female protagonist with several portraits each, but otherwise unable to customize them at that point. During the course of the game, additional characters may be recruited in various places in Lyramion; up to six form an active party that participates in combat. All characters can train physical attributes by specific NPCs in various towns, while some can also buy, learn, and cast offensive, supportive, and healing magic spells.

In Ambermoon, the player plays as the grandson of the hero of Amberstar. The grandfather of the player explains at the beginning of the game that his presumed-dead companion spoke to him in a dream of a new threat to the land of Lyramion. He consequently sends the player on a journey to Newlake, where he can speak with his old companion.

Those familiar with Thalion's games could find many connections to other games. The main character from Lionheart makes an appearance, as does the main enemy from Amberstar. By way of a dimensional gate, the player briefly enters the world from Thalion's previous game Dragonflight.