The Legendary Axe takes place in "a faraway land" in the village of Minofu, whose people have been under the control of the cult of Jagu. Every year, they village's people must hand over one person as a human sacrifice to the Jagu. The game's protagonist, Gogan, has been away in a remote village studying warfare when he finds out that his childhood friend, Flare, has been selected by the Jagu as their annual sacrifice. Rushing back to Minofu, he finds that she has already been taken by the Jagu to the "Evil Place" located in the mountains. The village elders hand Gogan the Legendary Axe named "Sting" which gives him great strength to fight the evil cult. Armed with this axe, he sets off to the Evil Place to defeat Jagu and his cult and rescue Flare.