Under a Killing Moon takes place in post-World War III San Francisco in December 2042. After the devastating events of the nuclear war, many major cities have been rebuilt (as is the case with New San Francisco), though certain areas still remain as they were before the war (as in Old San Francisco). The war also left another mark on the world: the formation of two classes of citizens. Specifically, some people have developed a natural resistance against radioactivity, and thus are normal or "Norms"—everybody else are Mutants in some form. Tensions between the two groups have risen dramatically and Norms and Mutants usually do not get along. The Mutants are usually forced to live in the run-down areas of cities such as Old San Francisco. Tex Murphy lives on Chandler Avenue in Old San Francisco. All his friends are Mutants, though he is a Norm.

In Under a Killing Moon, Tex Murphy, a private investigator, has hit rock bottom. Recently divorced from his wife Sylvia, out of work, low on cash, and living in a rundown part of Old San Francisco, Tex realizes that he has to get his act together. Tex sets out to hunt for work. He finds it quickly once he discovers that the pawnshop across the street from his apartment has been burglarized. Tex quickly solves the case, and feels his luck has begun to change. Then a mysterious woman calling herself Countess Renier, having heard good things about Tex, hires him to find her missing statuette. Everything seems great at first and the Countess is promising to pay Tex more money than he has seen in his life. However, everything quickly goes downhill when Tex finds out about doomsday plot by a deadly cult calling themselves the Brotherhood of Purity.