| Spoiler warning!|
This article contains plot details.
The game opens during the Year of the Dragon, a time when new dragon eggs are brought to the realm. Inside a temple, a dragon named Ignitus is watching over an egg containing a purple dragon. There is a prophecy that every ten generations, a purple dragon is born. This dragon will direct the fate of that era.
However, an enemy called the "Dark Master" also knows of the prophecy. His forces lay siege to the temple, intending to destroy the eggs so the purple dragon could not be born. The egg is sent down a river by Ignitus and it is soon discovered by two dragonflies, Flash and Nina. When the egg hatches, they adopt the dragon and name him Spyro.
Years passed and one day, Spyro and Sparx were attacked by a group of apes. Sparx was captured by them and Spyro defeated most of the group. The leader was about to kill Sparx and Spyro unconsciously used his fire breath. Spyro dealt with the rest of the apes while their leader retreated.
When the two returned home, Spyro was told that he wasn't a dragonfly. Hearing this, Spyro left the swamp in search of his true home. Sparx followed Spyro and they were pursued by hostile forces. They eventually met Ignitus, who was pleased that Spyro was alive. However, with the Dragon Temple under the control of a large, black dragon named Cynder, he feared that the war against Malefor's forces was already lost.
Ignitus was then convinced by Spyro to lead him to the Temple, where Spyro drove Cynder's forces out. Afterwards, Ignitus revealed more about the war, gave Spyro some fire training, and sent him out to rescue the other three Dragon Guardians; Volteer, Cyril, and Terrador.
The first place he went to was Dante's Freezer, where he fought the Ice King and rescued Volteer, the Electric Dragon Guardian. After they returned to the temple, Volteer trained Spyro in the art of electricity. However, Volteer explains to Ignitus that some of his power was lost inside a crystal that Cynder stored.
Spyro then went to the Tall Plains to find Cyril, the Ice Dragon Guardian. Near the shrine where Cyril was, Sparx saw Cynder fly off without noticing them. At the shrine, the Stone Sentinel awakens and battles Spyro. The purple dragon wins and frees Cyril.
Back at the Temple, Cyril taught Spyro how to use ice powers. He also discussed what Cynder's plans could be with Ignitus and Volteer. Ignitus believed that Cynder was going to use the Guardians' powers to open a portal that should never be opened. Spyro questioned him but instead of answering, he sent Spyro to the Munitions Forge to free Terrador, the Earth Dragon Guardian. While there, Spyro battled the Conductor and his evil locomotive called Steam. When Spyro defeated them, Terrador was freed.
Cynder then appeared and chased Spyro throughout the Munitions Forge while the Forge's volcano erupted around them. Ignitus intervened and fought Cynder, resulting in him being captured. Spyro felt guilty for letting Ignitus down and was afraid to face Cynder. Terrador told him that all warriors felt fear and taught Spyro how to master his fear and how to use earth powers.
Terrador explained to Spyro and the other Guardians about Cynder's lair. Spyro went there and found Ignitus, who was trapped and his powers were being drained. The purple dragon noticed something familiar about Cynder and Ignitus then told Spyro that Cynder was born from the same batch of eggs as Spyro. However, she was taken by Malefor's forces and corrupted by him. He was using Cynder so she would unlock the portal to his prison, as only dragons who were born on the Year of the Dragon could do so.
Spyro followed Cynder through the portal and caught up with her. However, she already gave Malefor a means of escape and challenged Spyro to a final show down. At the end, Spyro used all of his power to defeat Cynder, freeing her from Malefor. This returned her to her true form: a dragon the same size and age as Spyro. The portal began to collapse and pull Spyro, Sparx, and Cynder inside. Sparx insisted that they escape but Spyro refused to leave Cynder with Malefor. having grabbed Cynder, they made it to safety.
Once they were back at the Dragon Temple, the Guardians congratulated Spyro. Sparx then proceeded to rant about how he didn't get any credit for helping. However, due to the battle, it would take time for Spyro's powers to return. Both Spyro and Cynder then gazed up at the stars, fully aware that the battle was far from over.
The game has received mixed to negative reviews.