As the game starts, your party of adventurers has just won a great victory over evil Zhentarium forces at the ancient city of Ascore. But there is still trouble in the land. Far to the southeast, the dwarfs of Llorkh are fighting for their lives as they launched a rebellion against their Zhentarim masters. The black-cloaked forces of evil are counterattacking fiercely as they strive to hold the last Zhentarim base in the Savage Frontier.

A few weeks after the events of Gateway to the Savage Frontier, the mage Amelior Aminitas magically summons the party (by now called the "Heroes of Ascore") to eliminate the (apparently) last remaining troops of the Zhentarim from the dwarven city of Llorkh.

Afterwards, the party is given a seemingly simple mission – to protect ambassadors of the "Lord's Alliance", which holds together the different cities of the frontier. However, the ambassadors are kidnapped, the Zhentarim and its allies (the Kraken Society and the Hosttower of the Arcane) plot to break up the alliance to conquer the region, and the party is framed as traitors.

Much of the game is devoted to having the players attempt to clear their names (usually done by completing a mission in each town of the Lord's Alliance) and alert the alliance's leaders of the plot. The final mission (which does not necessarily fit in the overall plotline) involves retrieving a treasure held by a dragon.

To uncover the plot, the player has to collect two different sets of items:

Three different colors of crystals held by one of the three enemy groups (the Zhentarim, the Kraken, and the Hosttower). This can only be done by, in melee battles, carefully selecting and attacking different enemies in the right order.

"Lucky papers" from each city in the game. Nominally good luck charms, when combined with the crystals, these papers spell out the entire enemy plot.