The fictional world of Grandia Xtreme is populated by three races: the militaristic and resourceful Humans; the pointy-eared Arcadians, characterized by their magic; and the tribal, beast-like Hazmans.

At the beginning of the game, the three races have co-existed in an uneasy alliance for several years, but a natural disaster known as the "Elemental Disorder" occurs and threatens them.

Evann is thrown into a series of events that will lead him to discover the cause of the Elemental Disorder, the military's real intentions, and hidden truths behind the ruins.

Seven characters join Evann as playable characters: Carmyne, a sergeant of the Nortis Army who fights with a saber and dislikes taking orders, but revels in giving them; Brandol, a brave but gentle soldier who wields a long sword and has a knack for engineering; Myam, a young and impulsive archer from Hazma; Lutina, a cold-blooded, experienced officer from Arcadia fighting with a dagger; Ulk, an aged Hazman wielding an axe and working with the Nortis Army; Titto, a young and timid Arcadian knife-user only comfortable around Jaid; and Jaid himself, an arrogant staff-wielding knight from Arcadia.

[8] The game was released in Japan on January 31, 2002 in either regular or limited edition, the latter including as bonuses a Grandia Xtreme pocket watch and a small "Geo Gate" diorama depicting the protagonist Evann.

[3] The voice acting for the English-language version was directed by WorldLink Technologies in Seattle, Washington, with large involvement from Enix America.

[13] The score of the game was composed by Noriyuki Iwadare in about half a year, with a focus on battle and dungeon music and an overall theme of friendship.

[14][15] The composer used the looped streaming ADX format as in previous Grandia titles and had no technical issues working with the PlayStation 2 hardware.

However, he was perplexed at first due to not being specialized in the militaristic aspects of the game's plot;[14] in particular, he had difficulties completing the opening "Theme of Xtreme", and could not find any inspiration for it for two months.

[14] The track "Quan Li" was composed with the same melodic motif as the ending theme, but with the sharp note omitted to musically convey the wrongness associated with "causing pain and spilling blood in the name of a Holy War", as witnessed in the plot of the game.