The game offers a lot of choice in respect to how individual players wish to play. The main focus of the game is entering the tower and destroying its denizens, collecting treasure and monster eggs to hatch into familiars. Each monster has hidden spells, unique traits, and abilities. Koh can also improve the town, along with decorating his home.

Azure Dreams is set in a town called Monsbaiya. Located in the desert, the town prospers only because of the Monster Tower looming over it. In this town lives a skilled and famous monster tamer named Guy. On a stormy day, Guy disappears in the tower, never to be seen again. Ever since he disappeared, Guy's family has struggled to get by, putting all their hopes on Koh, his son, who will be allowed to enter the tower when he turns 15. When Koh finally reaches adulthood, he meets a vagabond familiar named Kewne, a monster that can speak the human language. Kewne and Koh then embark on a quest to reach the top floor of the Monster Tower and find out the truth about Guy's fate.