Shining Force is a turn-based tactical RPG. Battles take place in square grids, and each unit occupies 1 square. Units can belong to one of two sides: allies (controlled by the player) or enemies (controlled by the computer AI). Each unit can move up to a fixed amount of squares along the battlefield, determined by its Move statistic. Depending on its location relative to enemies and to allies, a unit also has the option to attack, cast a spell, use an item, search (if adjacent to a treasure chest), or stay and do nothing, all of which end the unit's turn. Some commands, such as equipping or dropping items, don't count as actions, and the character's turn is able to continue. The order of the turns is determined by the unit's agility score and a random seed. Units can use offensive actions, such as physical attacks or offensive magic, only on units belonging to the other side and can use supportive actions, such as healing magic, stat-enhancing magic, and items, only on units belonging to the same side.

The game opens in the Kingdom of Guardiana, in the land of Rune. The protagonist, Max, is sent on a mission to prevent Darksol, who commands the hordes of Runefaust, from opening the Shining Path and resurrecting Dark Dragon. Along the way, Max recruits a number of allies to join the Shining Force. Opposing the Shining Force are foes such as Kane and King Ramladu, who were both corrupted by Darksol. Eventually Max forges the legendary Chaos Breaker, and uses it to reach the Castle of the Ancients, where Darksol plans to resurrect Dark Dragon.