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In the year 20XX, a U.F.O. lands in the area around Megalo City. A team is sent to investigate, but they find no trace of any life form inside. After a year has passed, the city's mayor, out of nowhere, decides to host a fighting tournament to determine the strongest fighter in the world. However, something sinister seems to be going on...

Masters of Combat is a versus fighting game, where you choose one of the final four participants in the tournament and need to defeat your three opponents and yourself in a mirror match, before you can take on the final boss. Unlike most fighters, the game does not use "up" on the D-pad for jumping, but one of the other buttons, leaving one button for punches and kicks.

The game has three levels of difficulty, but the easiest mode ends after four of the five fights.