Set in 19th Century Japan, the player takes on the role of a ronin who wanders into a remote village and becomes involved in a conflict between rival clans. A known feature of Way of the Samurai game is the Choose Your Own Adventure style branching storyline, which allows minor decisions by the player to radically alter the course of the story.
The story takes place in 1877, after the fall of the Tokugawa Shogunate and the start of the Meiji Era, during the Satsuma Rebellion, a time when the samurai who were once at the top of Japanese society are all but outlawed. The game begins with the player, taking the role of a wandering ronin, arriving in a fictional outpost called Rokkotsu Pass.
Rokkotsu Pass is a thinly populated village, whose main attractions contain a railway crossing, a small restaurant, and an iron foundry. Three separate factions are competing for total control of Rokkotsu Pass, each with their own agenda. The first is the new centralized government, whose army has been sweeping through the country securing power from the local warlords. The government army is well-funded and equipped with modern weaponry, including firearms and cannons, making them difficult opponents for the former samurai lords.
The second faction is the Kurou family, who previously held control in Rokkotsu Pass and continue to exert their influence on the people through extortion and intimidation. Lead by Tesshin Kurou, the family is resisting the government's attempt to take control of Rokkotsu Pass, however the samurai cannot compete with the modern army. In an attempt to secure funds, the Kurou intend to sell the iron foundry to the government.
This decision by the Kurou puts them in direct opposition to the Akadama clan, whose leader, Kitcho, is the illegitimate son of Tesshin Kurou. The Akadama wish to expel the government forces from Rokkotsu Pass, and plan to stop the Kurou family's attempt to sell the foundry.
Caught in the middle of this power struggle are the village peasants, who are likely to be oppressed regardless of who is in control.
