The story takes place on a colony founded by the legendary Alisa Landeel and chronologically fits between Phantasy Star and Phantasy Star II, precisely 471 years of distance between each other. Few years after the first game, Alisa settled in Copto, but an evil being known as Kaburon dominates/controls this newly found planet. Alisa temporarily defeats him by sealing him away in his own castle. She then sees a vision of the future. In this vision, Kaburon escapes and causes havoc. Alisa then decides to put a risky plan into motion....

Four centuries later, in AW813, an orphan named Minina of the town Tedo tells her friend Alec that she found the Light Pendant in a nearby cave. After discussing the significance of this find, the two learn that Alec's father Morg has been taken captive during his search for the Laconian weapons by the Daidalus bandits. After discovering a secret scroll, Minina learns that she is the descendant of the colony's founder, Alisa.

During their journey, they meet up with Doromu (a dwarf of the forest) and a Lars (Alisa's android). The game takes them all across the world into various caves and distant villages. Alec and Minina's main goal is to find the sacred Laconian weapons in order to defeat the evil force ruining the land.

Near the end of the game, Alec and Minina discover Alisa in a hidden cave under cryonic sleep. After awaking her, they team up to take on Kaburon. Once he is defeated, the game ends with Alisa informing you that even though Kaburon is dead, "A greater evil is awakening. Not in Copto.." and she's needed, to save the Algol system once more.

Playable characters

Minina

• Japanese: ミニナ (Minina)
• Also known as Mnina, Nina, Mina, Minima
• Race Palman
• Job Unknown
• Weapon(s) Cane
• Starting Level 1
• Background Minina is an orphan child that was raised by the Elder of Tedo. Her name was chosen by Alisa many centuries before she was born (which may come from the Portuguese word "Menina", meaning Miss or little girl as well as the Spanish "Mi niña" ("my little girl"/"my daughter"), having both similar meanings and fitting well in the context). In AW813 she found a light pendant in a cave nearby Tedo. Old Tod, from the same village, believed that Minina and Alec were the two youngsters that (according to "The Book of Truth") would defeat Kaburon (romaji for Cabron). She decides to assist Aleck in the search for his missing father Morg and later, with the help of Doromu, she fixes Dalos who Alisa instructed to help and protect her. At the end, Minima meets Alisa who reveals that she is her clone, though she still considers Minina to be her daughter.

Alec

• Japanese: アレック (Aleck)
• Also known as Alec, Alex
• Race Palman
• Job Weapon Shop seller (Part-time)
• Weapon(s) Swords/Knives
• Starting Level 1
• Background Alec is a boy that lives in the Town of Tedo and, like his childhood friend Minina, venerates the legend of Odin (タイロン (Taylon)) and Alisa (アリサ (Arisa)). Alec is the son of Morg and usually replaces him at the shop during his absence. Two weeks before the beginning of the game, his father departed with his friend Taylor in the search for the Laconian items, the only weapons that could defeat Kaburon. As Minina showed off her newest find, the light pendant, Taylor appears suddenly and is injured. He announces that Alec's father was captured by Daedalos. Alec, joined by Minina, decide to go on a quest to find Alec's father. At the end, Alec is entrusted by Queen Alisa to take care of Minina.

Doromu

• Japanese: ドロム (Doromu)
• Also known as Dorom, Dirk
• Race Palman
• Job Sluice's keeper
• Weapon(s) Cane
• Starting Level 10
• Background Thanks to his small stature Doromu is known to be a dwarf of the Mayoi forest. However, he is, in fact, the elder brother of scholar old Rob of Tedo (the town of Aleck and Minina). He helps the prophesized young heroes to reach Daedalos. Doromu is the only one at that time to recognize Dalos as the android of Queen Alisa. He also seems very knowledgeable when it comes to the architecture of an android, as he is the only one capable of fixing Dalos. Doromu is also the keeper of sluice's river near Tarimu, the region where Alisa has hidden the sacred Laconian items that once defeated Dark Force.

Dalos

• Japanese: ダロス (Dalos)
• Also known as ダイダロス (Daedalos), Δαίδαλος (Daidalos)
• Race Android
• Job Royal servant
• Weapon(s) Axe
• Starting Level 15
• Background Dalos is an android from the court of Landeel (as seen by his royal helmet and cape). He came with the Queen Alisa Landeel to Copto in order to support her colonization project. He commands the Queen's robotic army in a way similar to that of Siren and he can transform into several varieties of transportation. Like Forren in Phantasy Star: Sealed Memories, he manages the production of bio-monsters. Taking care of Minina and helping her in her destined quest were the instructions given to him by Alisa. However, after she entered into cryogenic sleep, Dalos was hacked by Kaburon's powers. This caused him to turn into Daedalos. As Daedalos, he prevented people from reaching the Laconian items, by making them captive and destroying their towns. According to Kaburon, it was Deadalos who helped him break free from the seal and regain his powers. Latter Minina, with the help of Alec and Dorum, turn Dalos back to normal, allowing him to accomplish his original mission.

Alicer Landeel

• Japanese: アリサ・ランディール (Arisa Landiil, officially romanized as Alicer,Landeel)
• Also known as Arisa, Alis (PSI, II & IV US ver.), Alisa (PSIII US ver.), Landale (PSIV US ver.)
• Race Palman
• Job Queen
• Weapon(s) Sword
• Starting Level 20
• Background After defeating Reipard LaShiec in AW382 Alis became Queen of Algol. Few years later, she started a colonization plan and found Copto which, after colonizing it, became known as Aresaland. From Palma she brought her android Lars, her army of Robotcops, a cryogenic chamber and the sacred Laconian items that helped her against Dark "Pro" Phallus. After battling against Kaburon she prophesized that two youngsters, Minima and Alec, would have to face this demon in the future. In order to help them, she wrote her prophecies in a scroll that would be known as "The Book of Truth". After that, she hide the Laconian weapons on the caves at North of Tarimu and herself in a cave near Mayoi forest. She then entered cryo-sleep for about four centuries. As she had foreseen, she was eventually awakened by Lars, Minina and Alec. Together, they defeated Kaburon once for all. The defeat of this evil fiend was a great victory, but Alisa to felt the presence of a stronger menace arising in her home star system and thus, Alisa decided to return to Algol to protect her people once more.

Non-Playable characters

Kaburon

• Japanese: アレック (Kaburon)
• Also known as Cablon
• Race Unknown
• Job King
• Background Kaburon is the main villain of this game. Ironically his name comes from the Spanish word Cabron which very well represents his evil intent. He was the ruler of Copto, the planet where Alisa and her people had landed 400 years prior the game. After Alisa settled in that planet and name the region Aresaland (Are = "that", Saland = "the land") he begin to show his menace against these new colonizers from Palma. At the end of the war, Alisa (with the help of Dalos) managed to sealed him. Right after, she had a vision that he would break that seal and set the terror again in "Aresaland" ("That Land"). In order to destroy him, she would need the same weapons that once defeated Dark Force and the help from two youngsters from the future. Curiously, one of them would share the same blood as her - Minina a clone that would be born and raised about 400 years latter from Alisa's DNA. By the time Minina was born, Kaburon managed to "hack" Dalos (now Deadalus) who broke the seal and set Kaburon free.