The game begins approximately one year after the events of The Mask of Eternity, with Rosella and Edgar's wedding on the Isle of the Crown, in the land of the Green Isles where Alexander and Cassima are rulers. As Rosella is about to take her vow of marriage, a strange man in a black cloak comes from the crowd and casts a spell on her, which renders Rosella unconscious. As Edgar catches her, Alexander, her brother, suffers the same fate elsewhere in the castle. The stranger then vanishes from the wedding, leaving only his cloak behind.
Having picked up the cloak, Graham decides to ask around the castle in order to find out more clues about who its owner might be. Captain Saladin suggests to Graham to visit the Oracle who lives on the Isle of the Sacred Mountain in order to find out more. As Graham dresses up for an adventure and quits the castle, a storm begins and he is forced to take refuge in the ferryman's house, befriending Hassan. Eventually Hassan agrees to help Graham visit the Isle of the Sacred Mountain and lend his ferry to him. After some conversation with the Winged Ones, Graham is escorted to see the Oracle, but as she is unable to trace the source of magic from the cloak (knowing only that it is black magic), she sends Graham to see the druids living on the Isle of the Mists. Graham journeys there immediately, and talks to the Arch Druid. The latter informs Graham that he is aware of unusual events taking place, and while working on a reverse spell from black magic, proposes Graham tries to reach his wife and children in their dreams. At the same time Graham is given a list of ingredients that must be found throughout every consequent episode in order to help the Arch Druid counter black magic. As Graham prepares to leave the Isle, the storm becomes unusually violent, leaving him no other choice but to stay for the night.
Next morning, Graham sees the face of Shamir, the Court's genie, in the scroll, and rushes back to the Isle of the Crown. There, he visits the library and meets with Ali the book keeper as well as Jollo the royal jester. Ali tells Graham that he knows where to find one of the ingredients, but will require a map of the Isles in order to pin its location. As Jollo plays a trick on Graham, he is eventually able to gather one of the ingredients for the scroll (the lethal liquid). At the village square, Graham manages to get a map copy done for him, which he then shows to Ali to obtain the location of the item. Upon visiting Shamir at the Castle, Graham finds out that the genie once belonged to one of the members of the so-called "Black Cloak Society", who might be the owner of the cloak. Knowing that Valanice (and, thus, his own children) are descendants of the "Silver Cloaks", who were an ancient clan of magic protectors, Graham wonders if both are related. He then thanks Shamir and makes his way by sea to the location of the map given by Ali, in order to retrieve the second ingredient (a magical bag). Hassan suggests that the third ingredient might be found on the Isle of Wonders, but dares not step there after his quarrel with the Red Chess Queen. Graham journeys into the Isle alone and eventually makes his way to obtain the third ingredient (the animated vessel). At the same time a nameless cloaked man shows up in front of Graham and tells him to question Valanice about her druidic roots. As the man disappears, Graham runs back into the Castle in order to do so.
At the Castle, Valanice falls unconscious as Graham breaks into her room. She sees herself at 23 years of age, when she was forcedly taken away from her family by a certain wizard Shadrack. Shadrack keeps her in a deadly tower surrounded by her own nightmares. Back in the Castle, Graham, by her side, keeps a promise to help her. The list shows four new ingredients and Graham continues his adventure. Talking with Shamir the second time reveals to Graham that at least two of the ingredients, which he can use to revive the children, are found at the Isle of the Mists. Eventually Graham arrives there and meets again with the Arch Druid, who confirms the presence of the elements which can only be found in the depths of Mother Nature. In order to address it properly, Graham undergoes a ritual in which he proves that he is both a savior and a part of the Nature. Graham passes the guardians and accesses the Sanctuary within the Isle, usually only available to druids. There he meets and talks to the spirits of Nature, which explain that in order to obtain the requested items (a male subject's strength and a female subject's voice), Graham must enchant regular items with which he plans to do so. Graham touches the stones on an ancient tree to grant himself such power. Valanice is then shown to him by the spirits, and he understands that she was once a druid. At the same time, in her dream, Shadrack visits her in the tower and begins torturing her. Seeing all this, Graham rushes back into the Castle and reaches Valanice's crown, transporting himself inside her dream. After some fierce confrontation with the nightmares, he steps in and frees Valanice from the tower. As they are back in reality, a cutscene reveals that Shadrack was in fact the master of the Black Cloak Society, to which another prominent figure, Mannanan, once belonged. As Mannanan delivers young Valanice to Shadrack Shadrack, on the other hand, plans on tormenting Valanice In the present, Graham vows to destroy Shadrack whatever it takes. Having brought Valanice back into reality, he journeys to the Isle of the Mists once more and now asks for the items to be enchanted. Upon returning, he gets both ingredients from his children. He gets the third ingredient (a silver moon) from a crescent emerald shape he obtained from the druid tree, with the help of a blacksmith, and the fourth one (a pinch of lively shaken salt) from the druids at the Isle of the Mists. There, he sees Cassima in the scroll and travels back into the Castle to witness her give a speech of hope to her people.
