Taking place within the fictional province of Cyrodiil, the game's main story focuses on the player character's efforts to thwart a fanatical cult known as the Mythic Dawn that plans to open portal gates to a demonic realm known as Oblivion.

Development for Oblivion began in 2002, directly after the release of Morrowind, opting for tighter pacing in gameplay and greater plot focus than in past titles.

To design the graphics, Bethesda used an improved Havok physics engine, high-dynamic-range lighting, procedural content generation tools that allowed developers to quickly create detailed terrains, and the Radiant AI system, which enabled non-player characters (NPCs) to make choices and engage in behaviors more complex than in past titles.

[1] The player can follow side-quests, interact with NPCs, dispatch monsters, develop their character, and travel anywhere in the province of Cyrodiil at any time while playing the game, provided that the areas are not quest-specific and otherwise inaccessible when not questing.

[8][9] Magic skills rely on the use of spells to alter the physical world, to affect the minds of others, to injure and debilitate enemies, to summon monsters to help fight, and to heal wounds.

[8][10] Stealth skills allow the player to crack locks, haggle for goods, use speech to manipulate people, and apply cunning in combat through the use of a bow or with a sneak attack.

[8][11] The spells, weapons, and other tools such that a player needs to employ and enhance these skills, such as lockpicks, can be purchased in shops, stolen from NPCs, or found as loot on the bodies of foes or in dungeons.

[14] The screen constantly presents a heads-up display, which provides information about the character's health, magicka, and fatigue, all of which can be increased by leveling up.

The emperor and the Blades reveal that the player's jail cell contains a secret entrance to a part of the city's sewer that functions as an escape route.

Jauffre tells the player that the only way to close the gates permanently is to find someone of the royal bloodline to retake the throne and relight the Dragonfires—with the Amulet of Kings—in the Imperial City.

[20] The player, now recognized as the Hero of Kvatch, returns to Weynon Priory with Martin, finding that it has come under attack by assassins and that the Amulet of Kings has been stolen.

After gathering information, the player learns that the group responsible for Uriel Septim's assassination and the theft of the amulet are the Mythic Dawn, a cult dedicated to the worshiping of Mehrunes Dagon, the Daedric Prince of Destruction.

The player returns the Amulet of Kings to Martin, and they subsequently travel to the Imperial City with the Blades to relight the Dragonfires and end the Daedric invasion.

[23][24] During Oblivion's development, Bethesda concentrated on creating a system with a more realistic storyline, believable characters, and meaningful quests than had been done in the past.

[29] Procedural content generation tools used in production allowed for the creation of realistic environments at much faster rates than was the case with Morrowind.

The manner in which goals such as eating, sleeping, reading, and speaking to others are fulfilled is dependent upon the environment, the choices of other NPCs, and programmed personality values.

[45] Lead designer Ken Rolston found the plan to fully voice the game "less flexible, less apt for user projection of his own tone, more constrained for branching, and more trouble for production and disk real estate" than Morrowind's partially recorded dialogue.

"[46] Oblivion's score was composed by series mainstay Jeremy Soule, a video game composer whose past scores had earned him a British Academy of Film and Television Arts (BAFTA) award in the "Game Music Category" and two nominations for an Academy of Interactive Arts & Sciences (AIAS) award for "Original Music Composition".

[47][48] The official soundtrack to Oblivion, featuring 26 tracks spanning 58 minutes, was released in March 2006, via Soule's digital distributor DirectSong.

[49][50] Soule had worked with Bethesda and Todd Howard during the creation of Morrowind, and, in a press release announcing his return for Oblivion, Soule repeated the words he had said during Morrowind's press release: "The stunning, epic quality of The Elder Scrolls series is particularly compatible with the grand, orchestral style of music I enjoy composing the most.

[51] Soule stated that while composing the music, he did not imagine any specific characters or events; rather, he wanted it "to comment on the human condition and the beauty of life."

[60] A near-final build of Oblivion was shown at Microsoft's Consumer Electronics Show press tent in January 2006, showcasing the game's exteriors.

Pete Hines, vice president of public relations and marketing for Bethesda, said: "People were expecting the game to cure blindness and heal the sick.

[64] The official release date for the PC and Xbox 360 versions was originally November 22, 2005, but developmental delays pushed it back to March 20, 2006.

[69][70] This version includes graphical improvements that had been made since the PC and Xbox 360 release, and was subsequently praised for its enhanced visual appeal.

[92] Starting in April 2006, Bethesda released small packages of additional downloadable content (DLC) for the game from their website and over the Xbox Live Marketplace.

[93][94][95] Although gamers generally displayed enthusiasm for the concept of micropayments for downloadable in-game content,[93][96] many expressed their dissatisfaction at the price they had to pay for the relatively minor horse-armor package on the Internet and elsewhere.

[99][100][101] Other small DLC packs include a set of houses themed after the game's factions, a new dungeon, and new spells that were absent in the initial release.

The expansion offers more than 30 hours of new adventuring, and features new quests, voice acting, monsters, spells, armor, and expanded freeform gameplay.

"[124] X-Play's Jason D'Aprile stated, "All the games in this series have been known for their sheer vastness and freedom of choice, but the Elder Scrolls IV takes that concept and runs with it.