Following the defeat of the evil triad in the previous three Ultima games, the world of Sosaria changed beyond recognition: continents rose and sank, and new cities were built, heralding the advent of a different civilization. Unified by the reign of the benevolent monarch Lord British, the new world was renamed Britannia. Lord British wished to base people's well-being on the ethical principles of Truth, Love, and Courage, proclaiming the Eight Virtues (Honesty, Compassion, Valor, Justice, Sacrifice, Honor, Spirituality, and Humility) as the ideal everyone should strive for. The person who could accomplish full understanding and realization of these virtues would serve as a spiritual leader and a moral example for the inhabitants of Britannia; he alone would be able to obtain holy artifacts, descend into the Stygian Abyss, and access the Codex of Ultimate Wisdom. This person is the Avatar.
The fourth game in the Ultima series features an improved game engine, with color graphics and enhanced character interaction
The game is set in ancient Persia. While the sultan is fighting a war in a foreign land, his vizier Jaffar, a wizard, seizes power. Jaffar's only obstacle to the throne is the Sultan's daughter (although the game never specifically mentions how). Jaffar locks her in a tower and orders her, under threat of execution, to become his wife. The game's nameless protagonist, whom the Princess loves, is thrown into the palace dungeons. The player must lead the protagonist out of the dungeons and to the palace tower, defeating Jaffar and freeing the Princess in under 60 minutes. In addition to guards, various traps and dungeons, the protagonist is further hindered by his own doppelgänger, an apparition of his own self that is conjured out of a magic mirror.
In the game, the player character visits Lord British and is instructed by him to kill certain monsters. The final mission is to kill a balrog, and after this has been accomplished, Lord British proclaims that "thou hast proven thyself worthy of knighthood".