Darklarza, the Dragon Master, has been terrorizing the kingdom for many years. The king has retreated into exile with his bravest knight, Geraden, to hold his fort. Darklarza stages an attack on the king's exile fortress and manages to abduct the princess. It is up to Geraden to journey through the kingdom, rescue the princess, and put an end to Darklarza's reign once and for all.

Castle of Dragon is a side-scrolling action adventure in which Geraden must hack and slash his way through the kingdom and destroy legions on Darklarza's forces. Initially equipped with a sword and a shield, plus the armor on his back, Geraden can upgrade to more powerful offensive and defensive options, as well as obtain various powerful magic spells.