Oswald's story begins with him delivering the final blow to the Dragon Hindel. He explains he only killed Hindel because it was the request of his adoptive father Melvin. Hindel explains to Oswald that his true father was a man by the name of Edgar, but Oswald doesn't care about this information, claiming that it's just the name of a man who abandoned a baby to die. Hindel then goes on to tell Oswald to "Follow the Bird". Oswald then delivers the final blow, silencing Hindel for good.
Upon his return to Ringford, Melvin attempts to persuade Queen Elfaria of Oswald's by informing her of her victory of Hindel. When this fails to adequately impress the Queen, Melvin sends Oswald to infiltrate Ragnanival and gather information. In the meanwhile the Psyphersmith Brom has a change of heart concerning the Belderiver and attempts to warn Oswald about the curse the sword carries. Enraged, Melvin orders Brom sent to the netherworld. In Ragnanival, Oswald sees Brigan, who is talking with Skuldi. Skuldi attempts to convince Brigan to take over the country from Odin, but before their conversation can go anywhere Brigan notices Oswald was spying on them. The two go to battle, resulting in Oswald defeating Brigan. While attempting to escape, he notices Gwendolyn and falls for her.
Once back at Ringford, Melvin further attempts to convince Elfaria to mass-produce the Belderivers, though the queen refuses. Melvin next orders Oswald to further prove his ability by performing well in the upcoming battle with the Aesir over the Crystallization Cauldron. During the battle, he encounters a pair of Halja who claim that Melvin had sold him for the power the Belderiver carries. Though Oswald dispatches the messengers of death, he begins to feel weak. During the battle, the queen Elfaria was killed by the Demon Lord Odin, resulting in the princess Mercedes being crowned Queen. Melvin decides to rebel again Mercedes, and send Oswald to Elrit Forest to ensure Beldor's support in the upcoming rebellion. Oswald travels to the Forest of Elrit and meets Beldor. Oswald tells Beldor to join in Melvin's rebellion. However, Beldor mockingly refuses and sends in Belial to attack Oswald. Even Beldor is taken aback as Oswald fearlessly battles his dragon. The two trump cards of the Vanir battle with Oswald emerging victorious. Beldor had no other choice but to join the rebellion.
However, as the Halja were draining Oswald's power, he was unable to fight during the Rebellion at his full power and was defeated in battle with Mercedes. In his final moments he finds Melvin and asks just what he meant to him. Melvin replies that Oswald was only a tool through which he would achieve power. This revelation crushes Oswald and leaves him unwilling to defend himself as a Halja appears and takes him to the Netherworld.
There, Oswald encounters Brom, who explains the circumstances surrounding the day Melvin found the orphaned boy. Oswald walks off into the depths of the Netherworld in despair, saying that while he was not afraid to die, the thought of dying and having lived a worthless life terrifies him. Suddenly he sees the phantom of a blue bird, which gives him hope for an unknown reason. Following the bird, he comes upon Queen Odette's shrine in the Nerthworld, and immediately attempts to attack her, though his attacks have no effect and she merely laughs at his effort. Once Oswald stops, she explained his powers were obtained from her, and thus he could not harm her. Initially she threatens to torture him for the remainder of eternity, when suddenly her mood changes and she instead offers to cure Oswald of the weakness he had been feeling in exchange for serving her. Though not enthusiastically, Oswald does agree to serve her, and Odette's first order for him is to kill the Demon Lord Odin who was once again attempting to steal Phozon Crystals from the Netherworld.
Oswald defeats Odin, but before he could land the finishing blow, Odin offers to show Oswald the way out of the Netherworld in exchange for being spared. Oswald eventually agrees, and Odin takes him to Ragnanival where he recieves a cold welcome from Odin's forces. Odin then offers Oswald a mission to undertake: Oswald would travel to Winterhorn Ridge and slay the dragon Wagner, and in exchange Odin would grant Oswald the Abandoned Castle as well as Gwendolyn's Spear. Initially Oswald is uninterested in Odin's offer, so Odin eventually decides to add the still-slumbering Gwendolyn to his offer. At this Oswald remembers her and agrees to undertake the quest.
Oswald travels to Winterhorn Ridge and calls out Wagner to do battle with him. The dragon does indeed swoop into action, eager for the chance to avenge Hindel's death, swearing to kill Oswald in the most painful way possible. The two do battle, and Wagner falls. Oswald claims the Ring Titrel from Wagner's corpse, and at that moment, Odin arrives, demanding Oswald give him the ring. Oswald however claims the ring was not part of their deal, and refuses to give it to Odin, going as far as to threaten to battle Odin again when the Demon Lord demands it once again. Odin begrudgingly allows Oswald to keep the ring, and holds to his end of the deal and gives him the Castle, Spear and Gwendolyn.
Back at the Castle, Oswald waits for Gwendolyn to awaken, but eventually her attendant Myris tells Oswald that she can only awaken if she is kissed, and she will then love whoever kissed her. Oswald however refuses to force her to love him, and resolves to awaken her in a different way. At that moment, Skuldi arrives and takes Gwendolyn away from Oswald. Before leaving, Skuldi says to Oswald to "Tell Odin, that the Three Wise Men of Titania have his daughter".
Oswald persues Skuldi to Titania and corners the sorcerer in the Sewer Maze. There he battles Skuldi and a pair of Desecrators the Sorcerer called to his aid, and pulls through. Skuldi informs Oswald he gave Gwendolyn over the Inferno King Onyx in order to bait Odin and Onyx to go to war. Oswald then finishes Skuldi off, citing his reason as that Skuldi intended to use Gwendolyn as a tool.
Oswald rushes to the Volkenon Lava Pits Odin beats him there, and confronts Onyx. The two were about to go to blows when Onyx reveals his plan: to awaken Gwendolyn and force her to love him. Odin merely laughs at Onyx's plan... Later Oswald himself arrives in Onyx's court, and is releived to find Gwendolyn still sleeping. Onyx arrives, and the two do battle, with Oswald emerging victorious.
Onyx then tells Oswald the truth: Odin's spell on Gwendolyn would indeed break when she was kissed, but no magic could force her to fall in love. He then cries his sorrow for having lost Gwendolyn, who he claims to love. Feeling sorry for Onyx, Oswald pledges his services to the Inferno King for one time whenever Onyx chooses to use him, and departs with Gwendolyn.
Back at the castle, Oswald says that while he is afraid Gwendolyn will leave him, he would also like for her to awaken and be able to make her own choice, and so he kisses her