In the kingdom of Fairyland, three magic jewels were enshrined in the palace to maintain peace in the kingdom. One day, an evil man broke into the palace and stole one of the three magic jewels. Without the third jewel, the two remaining jewels lost their magic sparkle. The magic spell that sealed the power of Boralis, the most vicious demon in the kingdom, was broken. During the turmoil which followed, the last two jewels were stolen. Boralis cast a special magic on Princess Ann, turning her into three fairies, and hid her somewhere in the kingdom. He then let loose a horde of monsters across the land and became the ruler of the kingdom.

Finally, the young knight Jim stood up and took action to restore peace in the kingdom. He bravely made his way into the wilderness in full armor to fight the monsters...

• Jim: Hero
• Ann: Princess
• Boralis: Villain

Hydlide is one of the first Japanese role-playing video games. The game appears to have been influenced by Dragon Slayer, The Tower of Druaga, and the original Ultima, though Hydlide failed to capture the same attention as the aforementioned titles beyond Japan. It was initially well received and considered an innovator when released in Japan back in 1984. Some of these innovations include being able to switch between attack mode and defense mode, quick save and load options which can be done at any moment of the game through the use of passwords as the primary back-up, and the introduction of a health regeneration mechanic where health and magic slowly regenerate when standing still. However, the game took several years to release in America, by which time The Legend of Zelda had a more refined, advanced take on the action-RPG formula; thus, Hydlide was criticized by American audiences as primitive in comparison. The game had an influence on the acclaimed action RPG series, Ys, which for example, uses a similar health-regeneration mechanic. The recharging health mechanic first introduced by Hydlide in 1984 would, decades later, become a common mechanic widely used in many video games.

The NES version of Hydlide is also infamously known for its repetitive music that bears similarity to John Williams' Indiana Jones theme. This is because it is one of the only two RPG/Adventure games made for the Family Computer (NES) without bankswitched memory; the other, Enix's adventure game PORTOPIA Renzoku Satsujin Jiken, has no music at all.

Hydlide had several follow-ups:

• Hydlide II: Shine of Darkness was originally released for the NEC PC-8801 in 1985 and then ported to the MSX in Japan. An official English version was released through the Dutch MSX games distribution platform WOOMB.net in late 2006, the first official release outside Japan. The game introduced a morality meter, where the player can be aligned with Justice, Normal, or Evil. Killing humans or good monsters lowers the player's morality, while fighting evil monsters increases it. If the player has an evil alignment, the townsfolk will ignore the player, denying access to certain clues, dialogues, equipment, and training. The game also introduced a time option, allowing the player to speed up or slow down the gameplay.
• Hydlide 3: The Space Memories was released in 1987 for the MSX in Japan; a Family Computer version (with the subtitle 闇からの訪問者 = yami kara no houmonsha = visitor from darkness) was released in Japan in 1989. The game retains the morality meter of its predecessor and expands the time option with an in-game clock and a need to sleep and eat. The game uses four distinct character classes. This game was also re-released through the Dutch MSX games distribution platform WOOMB.net in late 2006, with an English translation.
• Super Hydlide is a remake of Hydlide 3 released for the Sega Mega Drive. It was released in Japan in 1989, in North America in 1990, and in Europe in 1991.
• Virtual Hydlide is a 1995 remake of Hydlide, still developed by T&E Soft but released exclusively for the Sega Saturn. It uses pseudo-3D graphics, a live action player character, and a system which creates a new game world for each game by randomly selecting from sets of pre-designed level maps.