It was originally released in 1997 in Japan, January 1998 in North America by Working Designs and June 1998 in PAL territories by Sony-owned Psygnosis.

[2] The game's protagonist is a young man named Alundra, who learns that he has the power to enter people's dreams.

The narrative becomes gradually darker and more twisted as the game progresses, dealing with mature themes such as death, clinical depression,[6] fate, religion, and the essence of human existence.

[7] The gameplay involves extensive exploration of the island and various dungeons, with an emphasis on challenging puzzle solving, real-time action combat, and platforming,[8] as well as interaction with non-player characters in the village of Inoa.

It was praised for its well-written story and characterization, smooth game mechanics and platforming, challenging gameplay and puzzles,[8] and expansive overworld exploration.

Another dreamwalker, Meia, from the clan Elna arrives to the city and helps Alundra fight off the nightmares of the villagers.

Once Alundra discovers the truth, he gathers the information and items needed to access Melzas' palace to defeat the demon.

[18][20][21][22][29] Next Generation stated that "Working Designs made a smart decision importing Alundra, and any gamer looking for a unique challenge is guaranteed to appreciate it.

[20][21][29] GamePro commented that "the game's heroic battle music will make you feel good about being the fighting savior of tormented sleepy souls.

"[29] Reviewers for Electronic Gaming Monthly (EGM) and GameSpot also praised the translation as being noticeably more restrained than Working Designs' earlier projects, in which the humor was often overdone to the point where it compromised the mood.

[22][29] GameSpot found that it is sometimes difficult to judge height and depth, forcing the player to proceed by trial and error.

He particularly praised it for featuring "a plot the likes of which I had never seen before in the genre," the strong "writing and characterizations," and the "clever and challenging puzzles.