The Binding of Isaac‍ '​s plot is loosely inspired by the biblical story of the same name. Isaac, a child, and his mother live in a small house on a hill, both happily keeping to themselves, with Isaac drawing pictures and playing with his toys, and his mother watching Christian broadcasts on television. Isaac's mother then hears "a voice from above", stating her son is corrupted with sin, and needs to be saved. It asks her to remove all that was evil from Isaac, in an attempt to save him. His mother obliges, taking away his toys, drawings, and even his clothes.

The voice once again speaks to Isaac's mother, stating that Isaac must be cut off from all that is evil in the world. Once again, his mother obliges, and locks Isaac inside his room. Once more, the voice speaks to Isaac's mother. It states she has done well, but it still questions her devotion, and requests she sacrifice her son. She obliges, grabbing a butcher's knife from the kitchen and walking to Isaac's room. Isaac, watching through a sizable crack in his door, starts to panic. He finds a trapdoor hidden under his rug and jumps in, just before his mother opens his bedroom door. Isaac then puts the paper he was drawing onto his wall, which becomes the title screen.

During the game's loading points, Isaac is shown curled up in a ball, crying. His thoughts are visible, ranging among rejection from his mother and humiliation from his peers to a scenario involving his own death. The game features 13 endings, one after each major boss fight.