About 1000 years ago, the First Exalt of Ylisse vanquished the Fell Dragon Grima using the treasured blade Falchion and the Fire Emblem. During Ylisse's founding, the period known as "the Schism", the other countries of the world thought that Ylisse would be too powerful if it held both the Falchion and the completed Fire Emblem. The five gemstones in the Emblem were distributed to each nation, leaving the Falchion and the Fire Emblem with the white gemstone, Argent, in Ylisse's care.
Approximately 15 years before the start of the story, Emmeryn, Chrom, and Lissa's father, the previous Exalt, waged a long war against the Grimleal situated in Plegia due to their worship of the Fell Dragon, Grima. When the Ylissean army began to decline in number, the Exalt began to conscript common peasants, despite having little to no training. The lack of peasants to farm the land and feed the country caused the country to decline, and resulted in poverty and famine.
Suddenly, the Exalt died, and Emmeryn inherited the Ylissean throne. Many feared that she would continue the war, but instead, she ended it and an uneasy peace was made between Ylisse and Plegia. Emmeryn immediately decreased the size of the army, resulting in less soldiers to patrol the country. While the Ylisseans were recovering from the war, the Plegians, led by Gangrel and seeking to take control of the continent, began to harass Ylisse by sending groups of bandits to raid the countryside, hoping to ignite the war again. Despite his attempts, Emmeryn did not wage an all out war, though Chrom and the Shepherds patrolled the land to stop Plegian incursions.
After stopping a Plegian raid on Southtown, Chrom, Frederick, Lissa and the Avatar make their way to the Ylissean capital. On the way, a mysterious portal opens up and dumps undead soldiers, forcing them into a quick fight. They defeat the undead with the help of a mysterious man and arrive at the capital, where Chrom discusses the undead soldiers with Emmeryn, and are promptly called the Risen. On the way to Ferox to get aid, another group of Risen ambush them, but are quickly disposed of.
When Chrom returns from Ferox, now with Khan Flavia's aid, quickly arrive at Themis, as Gangrel has kidnapped Maribelle and threatens to kill her if Emmeryn does not show up. When Emmeryn arrives, Gangrel demands the Fire Emblem in exchange for her life. Emmeryn refuses to let him have it, and Gangrel orders Aversa to kill Maribelle, but Ricken arrives and saves Maribelle. After disposing the Plegian soldiers in the vicinity, the Shepherds return to the capital, where Chrom and Lissa meet the mysterious man again. The mysterious man protects Chrom from several assassins, but loses his mask in the process and is revealed to be a woman. The mysterious woman tells Chrom to quickly protect Emmeryn, as assassins have been sent to kill her.
After subduing the assassins, Chrom decides to move Emmeryn to a safer palace that none of the nations know about. However, when Emmeryn hears that the capital is being attacked, she goes back despite Chrom and Phila's protests, not wanting to cower while the people are suffering. This results in her being captured quickly by Gangrel's men.
Chrom and the Shepherds, along with Basilio and Flavia, arrive in Plegia to free Emmeryn. Aversa summons a group of Risen Archers, which kill Phila and her squad, and Gangrel threatens to have the archers kill Emmeryn if Chrom does not give up the Fire Emblem. Emmeryn falls to her "death", shocking the rescue team, and Gangrel laughs out loud from it.
Eventually, Chrom resolves to kill Gangrel, which he does in the Battle of the Border Wastes, though unbeknownst to him, Gangrel had survived the battle.
During the next two years, with the help of Regna Ferox and reparations paid by Plegia, peace was restored. Out of respect for his "deceased" sister, Chrom forswore the title of exalt, though he did eventually marry and have a daughter named Lucina, who carried the Brand of the Exalt in her left eye.
Two years after Gangrel's defeat, the shadow of war fell over Ylisse again. Duke Virion of Rosanne came to Regna Ferox, asking for aid against Valm and its leader, Walhart the Conqueror, who had defeated all the other nations on the continent of Valm, and now set his sights on the continent of Ylisse.
Chrom is left with no choice but to parley with Plegia for aid, needing ships to intercept the Valmese Army. The new King-Regent, Validar, willingly provides ships and funds for the campaign, but claims they can spare no troops due to still rebuilding from the last war. Before they depart, Validar introduces them to a heirophant who bears an uncanny resemblence to Chrom's tactician, and even shares his/her name.
On the way back to the port, Chrom and the Shepherds are suddenly attacked by a group of Risen. They manage to drive them off with the aid of a Plegian Dark Mage. Chrom is suddenly attacked by an assassin, but is protected by "Marth," who calls him father and finally reveals her true identity as the future version of Lucina. With this battle ended, the Shepherds set sail to intercept Walhart's forces at sea, then push west to the continent of Valm and put an end to the Conquerer, also collecting four of the five gemstones for the Shield of Seals.
With The Conqueror defeated, Chrom and the Shepherds turn their attention to finding the last gemstone so they can complete the ritual of Naga. Validar catches wind of their search, and invites Chrom to Plegia so he can turn over the last gemstone to him. However, it turns out to be a trap, and Validar takes advantage of his control over the Avatar to steal the Shield of Seals and prepare to summon Grima.
Lucina realizes that the Avatar is susceptible to Validar's control, and comes to the conclusion that it is Validar that forces the Avatar to kill Chrom and bring about the dark future. In a desperate bid to stop it, Lucina attempts to kill the Avatar. However, either Chrom intervenes, or she can't bring herself to do it due to their relationship.
Chrom and the Shepherds go in pursuit, of Validar, and soon engage him in battle. Chrom and the Avatar manage to defeat Validar, but Validar once again takes control of the Avatar and has him attack Chrom with a Thoron. However, having received a premonition of this very moment, had replaced the Gemstones with fakes and weakened his attack so as not to kill Chrom. Having successfully deceived Validar and ruined his plans, the Shepherds defeat him once and for all.
However, the Avatar's doppelganger then reveals himself as the Avatar's future self, and uses the power of the Fire Emblem to awaken his full power and change into Grima once again. The Shepherds flee, but in the confusion, the Present Avatar succeeds in reclaiming the Shield of Seals, which Chrom uses to undergo the ritual and recieve Naga's full power, which empowers Falchion.
The final battle with Grima begins, with Naga lending her aid. The battle can end with either Grima being put back to sleep for a thousand years (if the final blow is landed by Chrom) or with Grima being destroyed for good (if the final blow is landed by the Avatar). Regardless of the outcome, the war finally comes to an end, and Chrom is officially welcomed as Ylisse's new exalt.
Spoilers end here.