The game begins in the small town of Sorpigal-by-the-Sea on the east of the Peninsula. A party of raiders arrive by ship to the region, on a task to reach the city of Karthal to bring the remains of their teacher to a temple there. Upon arriving they meet with a mysterious man named Dunstan, who reveals the city is closed off to outsiders following a coup, along with news that the town is also closed off as well following a spate of disappearances and problems. Aiding the town's garrison, the raiders deal with a spider's nest in the town's well allowing the town to open up again, and then take on further work to deal with naga in a nearby lighthouse, members of a cult operating in the region, followed by dealing with bandits in the nearby woods. Impressed, the garrison's captain sends the raiders to Castle Portmeyron to meet with the new governor, Jon Morgan, only to find the castle invaded by brigands and militia. Fighting against them, the group rescue the governor and agree to assist in investigating events in the peninsula; they also agree to take a letter to the pirate king, Crag Hack, to establish a truce with him.
The raiders first begin with heading out to the Elemental Forge, an ancient structure in the centre of the peninsula, investigating a dark elf presence in the tower, before heading out to Seahaven and the large woods nearby to meet with Lord Kilburn, who helps the raiders to identify the handwriting of a letter found on the militia that attacked the castle. Learning that the writing belongs to the former governor, Montbard, who is hiding in the Lost City, an ancient and ruined underground city, the party head underground and defeat him, returning to Morgan who wonders about how his predecessor was being funded to support his men. Regardless, he assigns the group to head to Karthal and find out what happened to his spy who had been working inside the city, a man named Falagar. Entering through the sewers, the group learns that Falagar was an ambassador in the city, and eventually get into Karthal through his mansion, just as the city finally opens its gates once again to outsiders, encountering Dunstan once more who reveals that fact.
Inside the city, the raiders meet with a former member of the group that took over, Hamza who is now organizing a resistance against the man in charge, who he reveals is Markus Wolf, and that his Black Guard, a ruthless mercenary group, took Falagar to a prison in the slums. The party is assigned to getting information on the place and a key to the sewers, before attempting a breakout, freeing Falagar who reveals that Dunstan had a part in the coup. Once the information is passed back to the governor, Morgan tasks the raiders with finding more out on Dunstan, meeting with a former raider friend of his by the name of Shiva, who reveals that he changed somewhat when he, she and other members of a raider party, attempted to enter the Tomb of a Thousand Terrors twelve years prior to the events of the game. The event ended badly, with her and Dunstan the only ones to leave, and both separating afterwards. The party soon head to the mountains, finding the tomb and entering it in their efforts to learn more on Dunstan, but are locked in the same dark elf they met in the forge.
Inside, they encountered a variety of shadowy creatures but also discover the corpse of Duncan, and a group of dark elves, leading to a discovery about what is going on. The raiders learn that Dunstan died in the tomb, and that he and the other raiders he'd entered with, had accidently released a faceless by the name of Erobos, a master of assassins, who was imprisoned by his own kind after the Elder Wars, when they broke the seal to his prison. Erobos stole Dunstan's identity, left him to die, and began devising a scheme to get revenge for his imprisonment, seeking to ignite a war on the peninsula, with the elf the party encountered one of his servants. Realising this, the party return to Morgan with the information.