Master of the Monster Lair is a dungeon crawling RPG with a different twist, whereas in previous dungeon crawlers the objective is to find the dungeons and monsters to clear them, the player creates the dungeon (or a monster lair in this case) in order to attract the monster and trap it to destroy it. There are 23 different rooms to customize for the player's Monster Lair.

The story takes place in a small town called South Arc where the nearby forests are harboring monsters who regularly invade the town and scare of the citizens. This is where the player takes control of an orphan called Owen who is searching for his first job where he encounters a magical talking shovel. After realizing his destiny, he decides to start digging a lair and destroy the monster infestation.