Ultima IV is among the few role-playing games, and perhaps the first, in which the game's story does not center on asking a player to overcome a tangible ultimate evil.

After the defeat of each of the members of the Triad of Evil in the previous three Ultima games, the world of Sosaria underwent some radical changes in geography: Three quarters of the world disappeared, continents rose and sank, and new cities were built to replace the ones that were lost. Eventually the world, now unified under Lord British's rule, was renamed Britannia. Lord British felt the people lacked purpose after their great struggles against the Triad were over, and he was concerned with their spiritual well-being in this unfamiliar new age of relative peace, so he proclaimed the Quest of the Avatar: He needed someone to step forth and become the shining example for others to follow.