Demonbane takes place primarily in a region resembling the Lovecraft Country common to several of the Mythos stories, including Herbert West-Reanimator and The Shadow Over Innsmouth.
Arkham City is also the territory of a criminal organization known as the Black Lodge, which has access to an array of giant mecha as well as a number of powerful sorcerers that make it difficult for law enforcement to effectively combat.
A separate portion of the story is set in the coastal town of Innsmouth and one of the climactic battles takes place over the sunken city of R'lyeh.
Kurou used to attend the Miskatonic University, majoring in Archaeology while secretly studying sorcery, but dropped out after an unspecified incident that has caused him to become averse to dealing with occult matters.
She is very kindhearted and rarely refuses to help Kurou in his times of need but cares deeply about his well-being, constantly pressuring him to go back to his studies, graduate, and find a real job.
In the space above Earth, the Deus Machina Aeon clashes with another unknown machine but due to its lack of a "master", it is defeated and crashes on the surface of the planet.
Meanwhile, a starving Kurou Daijūji attempts to acquire food from a local church run by Sister Leica, a nun that he has known since he first moved to the city several years prior to the events of the story.
This prediction is later proven true when a mysterious girl falls out of the sky onto him, subsequently introduced as Al-Azif, the physical manifestation of the Necronomicon, one of the most powerful grimoires in existence.
Kurou is then attacked by her pursuers, the Black Lodge, under the command of the mad scientist Doctor West and forced by circumstances to enter into a contract with the grimoire.
Kurou escapes with the aid of Metatron, a masked hero that wages a one-man war against the Black Lodge, and stumbles upon an underground hangar containing an imitation Deus Machina, Demonbane.
Al wants to begin instructing him in the use of sorcery immediately, but before he has a chance to prepare, Kurou is attacked by the leader of the Black Lodge, Master Therion.
Kurou's interference in the Black Lodge's operations causes Master Therion to send two of his elite Anticross sorcerers, Titus and Tiberius, to attack the Hadou headquarters directly.
Doctor West also repeatedly attempts to make up for his failure to capture the Necronomicon, assisted by a self-aware gynoid of his own creation named Elsa.
The story then moves to the coastal town of Innsmouth where Ruri has brought Kurou, Al, the Demonbane support team, and Leica on a beach holiday.
Kurou is later able to acquire Al's pages concerning another Great Old One, Ithaqua, and obtains a pair of handguns that serve as conduits for their power from a mysterious individual known to the Black Lodge as the Tyrant.
In the meantime, it is revealed that both the Necronomicon and the Tyrant are essential to a major Black Lodge undertaking, the C Project, but Master Therion appears unconcerned by the fact that his underlings have had no success in capturing either of them.
The Anticross betray Master Therion at the climax of the battle, seemingly destroying him along with Etheldreda, while Doctor West defects, disgusted by the perceived misuse of his technology.
While Demonbane is able to drive off the Destroyer Robots, the Illusionary Heart Mother is able to teleport away, the Anticross having gained control over Cthulhu through a series of emergency measures.
Master Therion then reveals himself, reborn as a result of his unique parentage; his father is the Outer God Yog-Sothoth and the true purpose of the C Project was to sacrifice Cthulhu as the catalyst of a ritual to summon it.
Demonbane then battles Therion's Deus Machina, Liber Legis, throughout time and space leading to a clash between the most powerful weapon in each mech's possession: the Shining Trapezohedron.
Liber Legis is defeated but Al is finally able to access the totality of her sealed knowledge and discovers the identity of the one who orchestrated all of the story's events: Nya, also known as the Outer God Nyarlathotep.
Soon afterwards, Al also activates Demonbane, a Deus Machina owned by the Hado Financial Group, to combat the mechanical menace from the Black Lodge.
斬魔大聖デモンベイン 軍神強襲 (Deus Machina Demonbane Gunshin Kyōshū - "The Assault of the War God"): Sequel to Kishin Taidou, but its relationship to the games is not apparent.