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The Bard is a cynical, opportunistic musician who roams the country in search of carnal pleasures. However, this impatient and selfish fellow is compelled to accept the greatest quest of his life: save the princess Caleigh from a demonic cult that has kidnapped her. The unlikely hero must now explore the land in search of the princess, accompanied by the omnipresent Narrator who obviously can't stand the Bard and uses every opportunity to sarcastically comment on his actions. Furthermore, Fionnaoch, the mysterious abductor of the princess, does everything he can to stop the Bard, sending his minions after him.

A self-proclaimed "quest for coin and cleavage", The Bard's Tale is an action RPG that is more of a whimsical take on role-playing games than a remake of the classic series. As the Bard, players can fight off hordes of foes with blade and bow, and summon companions through magical Bard Songs. Leveling up allows the player to raise the character's main attributes and invest specialization points in the different types of weapons he can use. Magical companions must be sought out and then summoned during battles. After being summoned, they act pretty much like AI-controlled party members; some of them specialize in physical attacks and offensive spells, while others can heal the hero.

During conversations the player can choose "nice" or "snarky" responses for the protagonist. While mostly used for humorous effect, some of these responses may affect subsequent events. The game uses the Dark Alliance engine and has a similar camera and control scheme.