| Spoiler warning!|
This article contains plot details.
The game begins in the Artisans World, where the Dragon News Network is conducting an interview. Astor, the dragon being interviewed, is asked about the threat of Gnasty Gnorc. Lindar, another dragon, answers instead and says that the gnorc is contained in a remote world. Going on, he says that Gnasty Gnorc is no threat, which angers him. The final straw is when Lindar calls him ugly. In a fit of rage, Gnasty Gnorc traps the dragons in crystal.
However, one dragon was missed; Spyro the Dragon, due to his small size. Spyro says that he has things to do and sets off on his adventure. Going through the five worlds, Spyro frees his fellow dragons before heading off to Gnasty's world. Once there, it is revealed through the levels that some of the dragons tried to help Spyro directly, only to be re-frozen in crystal.
After confronting Gnasty Gnorc and collecting everything in the Dragon Kingdom, Spyro gains access to Gnasty's Loot. Once all of his treasure is collected, Spyro is interviewed by the Dragon News Network. Immediately after the interview, the dragons are trapped in crystal once more, implying that Gnasty Gnorc is far from defeated.
The main character, Spyro is a small purple dragon. He must go through all of the worlds and free his dragon friends. Along the way, he must all collect all of the stolen treasure and save the stolen Dragon Eggs.
Sparx is a dragonfly and Spyro's sidekick. Following Spyro around, Sparx acts as Spyro's health meter. Sparx's colors range from gold (full health) to green (one hit point). If Spyro is hit when Sparx disappears, Spyro will lose a life.
The main antagonist in the game, Gnasty Gnorc has been a thorn in the Dragon World's side for years. He is the one who trapped the dragons and stole their treasure, using a spell to turn all of it into warriors.
The boss of the Artisans world, at first glance he appears to be a living pumpkin with a scythe. However, a few flames revealed him to really be a sheep on stilts.
The boss of the Peace Keepers world, this boss is invincible from the front. However, his back is open to a flame attack.
The boss of the Magic Crafters world, Blowhard is a weather wizard who can summon tornadoes and lightning. However, he is not immune to Spyro's flame.
The boss of the Beast Makers world, Metalhead is a giant robot and the only boss who can't be defeated with the power of flame. Instead, Spyro must charge into all of the energy poles around both arenas.
The boss of the Dream Weavers world, Jacques is a living jack-in-the-box. He will throw boxes at Spyro while he retreats upwards.
The dominate species of their world and Spyro's friends, the dragons are separated into five types: Artisans, Peace Keepers, Magic Crafters, Beast Makers, and Dream Weavers.
Gnorcs act as Gnasty's primary forces in the game. Most can be defeated with a simple charge or flame attack.
The game has received generally positive reviews. Reviewers mentioned that it had very good graphics for its time and that one of the only problems was the camera not following Spyro correctly.
- This is the only game where Spyro is voiced by Carlos Alazraqui.