A third-person action RPG with cooperative and competitive multiplayer elements in which the player enters the kingdom of Boletaria as it is being ravaged by a fog that spawns murderous demons. The player has to hunt down the arch demons situated in five disparate areas within the kingdom and partake in punishing combat to reach the Old One, the vengeful being that brought the fog to Boletaria.

Demon's Souls is set in a fictional dark fantasy world, taking part mostly in the southern medieval kingdom of Boletaria, that has been consumed by a thick, mysterious Fog that is creeping ever out to blanket the entire world. The Old One, a colossal immortal flying Demon, has been awoken and with it Demons have come forth to consume the souls of men. Only when The Old One is lulled back to eternal slumber will the fog dissipate and the world be restored.