King Asfal from the Dark World had a son named Galgear, who inherited a magic ring from him and grew insane as a result. The prince was imprisoned, but managed to break free, kidnap Valna, the queen of Vecanti, and install himself as the Dream Land's new ruler. Cham, the leader of the resistance against Galgear, hears the voice of Yuko, the former Valis soldier who has now become a goddess, telling her that one of the resistance members, a girl named Lena, is the heir to the Valis sword. Lena and her sister Amu decide to rescue Valna and find a way to stop Galgear.
Like its predecessors, Valis IV is an action platformer. It is similar to the previous game in allowing the player to control three different characters: Lena, Amu, and Asfal. Each of the characters wields a unique weapon (Valis sword for Lena, boomerang for Amu, and lance trident for Asfal) and has access to their own elemental spells (thunder for Lena, fire for Amu, ice for Asfal). Each one also has a special ability: Lena can slide through narrow passages, Amu can double-jump, and Asfal is immune to certain traps. Along with recovery and spell-enhancing (up to three levels) items, characters can also acquire special spheres that increase the overall count of their hit- and magic points.