The Legend of Spyro: A New Beginning deals with Spyro's birth and his journey to meet his destiny. The intro shows Spyro being rescued by a Guardian Dragon called Ignitus from the attack of the "Dark Master". After his eclosion, Spyro is raised by dragonflies in a swamp until one day he discovers that he is in fact a dragon, and he and his half-brother, the dragonfly Sparx, leave the swamp to find out more about Spyro's past and fight the forces of evil.

In contrast to previous Spyro games, the emphasis is put on combat instead of platforming. Spyro can do several combat moves, using both his tail and his claws, and has four different breath attacks: fire, electricity, ice, and earth. The game also features several rail shooter passages similar to games like Panzer Dragoon.