The game takes place in Dunwall, an industrial city that is filled with technology, as well as some supernatural forces. Some time before the current events of the game, an outbreak happened called the Rat Plague, decimating the population of Dunwall. With everything happening, there was a frantic search for help in dealing with this disease, with the main protagonist, Corvo, being sent outside of Dunwall to seek any assistance.
Returning to Dunwall to report back with his findings, Corvo is talking with the Empress when they are suddenly attacked by some assassins. Helpless due to some power he's never seen before, Corvo watches as the Empress is killed and Emily, the Empress' daughter, taken away.
While being questioned in prison, he learns that the Lord Regent, Hiram Burrows, planned all of this to happen. Sitting in prison, waiting for his execution day to arrive, he finds a key planted in his meal, which allows you to escape the place and arrive at The Hound Pits Pub, home to The Loyalists Conspiracy, a group of citizens aiming to overthrow the Lord Regent and his corrupt power.
It is during this time, while resting, that he is visited by The Outsider, a mysterious entity that ends up giving him supernatural powers. With these newfound powers, it is up to him to put an end to Hiram Burrows and rescue Emily Kaldwin, restoring her to her rightful place on the throne.