Many years into the future, a race of vampires have emerged, plunging planet Earth into darkness with an environmental control system called the 'paraSOL'. They now control the planet, with humans living in fear. When all hope seems lost, two boys with amazing power emerge to save the planet. The Dark Swordsman, Lucian, and a rookie member of the vampire fighting 'Guild', Aaron.

Lunar Knights is an indirect sequel to the Boktai series of games, which takes place many years after. Its focus is much more on action as opposed to stealth, although some stealth elements from the earlier games remain (for example, you can blow into the microphone to whistle and attract the attention of enemies). Players control the two characters, Lucian and Aaron. Lucian fights with a huge sword called 'Vanagand'. As a result, Lucian has a close combat style. Lucian uses the power of moonlight to fuel his special attacks and moves.

The other character is Aaron, a gunslinger for the Guild. He fights by using sunlight to charge up his gun, the Knight, and shoot ranged shots at foes. Aaron's special attacks and moves use up sunlight. Both Aaron and Lucian can use junk materials to increase the level of their weaponry, giving them more power.

The main goal of the game is to make your way through the dungeons and purify the vampire at the end. The dungeons themselves are fairly standard - you search for treasure chests, avoid traps and solve puzzles. At the end, you'll fight a boss vampire, and once you've defeated them, the Casket Rocket will be called. Because the vampires have blocked out the sun on Earth, you'll need to take the vampire into space to purify them.

At this point, the game becomes a touch screen controlled shooter. To control the ship itself, you drag it around the screen with the stylus. To shoot enemy ships, you tap them with the screen. Once you reach the end, the vampire will be purified by the magnified power of the sun.