Kingdom Under Fire II comes chronologically after the events in Circle of Doom - which took place within the alternative dimension of the game's antagonist - Encablossa. The game's events continue the story of the Kingdom Under Fire universe, 150 years after Kingdom Under Fire: The Crusaders, and introduce a new faction - the 'Encablossians', who have been brought from the Encablossan dimension by Regnier, an antagonist in previous games.
The game was to explore the wars between three factions: the Human Alliance, Dark Legion, and Encablossians in their struggle for control of the game's world, the continent of Bersia.