Despite characters, themes and weapons similar to Samurai cinema set in Feudal Japan Bushido Blade takes place during the modern era. This is shown, for example, when the player reaches the helicopter landing pad phase set in a large city. A fictional, five hundred year old dojo known as Meikyokan lies within this region, and teaches the disciplines of the master Narukagami Shinto. A society of assassins known as Kage also resides within the dojo. Once led by the honorable swordsman Utsusemi, he lost his position to Hanzaki, another skilled member of the dojo, in a fierce battle. Hanzaki gained respect as the Kage leader, until he discovered a cursed sword known as Yugiri. He began to change, disregarding the group's honor and the traditions held by its students.[4]

One day, a Kage escapes the confines of the dojo with its secrets. Several other members of the society, under penalty of death, are sent to dispatch the defector, only catching up to him (or her) within the ruins of the surrounding Yin and Yang Labyrinth Castle. In single player mode the players take on the role of the escaped assassin (independent of whatever character they choose), fighting their way out by killing their comrades one by one. Elements of the game story differ with each character selected.