The Last Remnant is set in a fictional world featuring a number of distinct humanoid races: the Mitras, human in appearance, the Yamas, strong fish-like people, the Qsitis, small reptilians, and the Sovanis, feline people with four arms. The world itself is broken up into multiple city-states, each with their own unique culture. The story of the game revolves around "Remnants", mysterious and coveted ancient artifacts of varying shapes and sizes which possess magic powers and have been the cause of several wars throughout the game's history. Each Remnant is "bound" to a specific person, who is the only one who can then use their power; powerful Remnants that remain unbound for too long have the potential to cause a "collapse" and spawn monsters. As Remnants come in varying forms, all cities throughout the world have at least one that their ruler is bound to that assist to govern and bring peace to their assigned realm.
The protagonist is Rush Sykes, an 18-year-old Mitra boy from a peaceful island. His 14-year-old sister, Irena, is kidnapped at the start of the game, and finding her is Rush's impetus for leaving the island. He immediately comes across David Nassau, the 19-year-old Mitra ruler of the city-state of Athlum, and his four generals: the 41-year-old Mitra Emma Honeywell, the 24-year-old Yama Blocter, the 55-year-old Qsiti Pagus, and the 200-year-old Sovani Torgal. These characters can be joined by several dozen other characters, many of whom are found through quests, while others can be hired at guilds. Every character has their own name and skillset, though the main characters have special additional skills. The main villain is the Conqueror, a Mitra who during the course of the game attacks many city-states of the world with his army. He is helped in this regard, first in secret and then openly, by Wilfred Hermeien, an older Mitra who is both the leader of the city-state of Nagapur with the ruling council of all of the city-states, and assisted by Wagram, a powerful Mitra sorcerer.