Jason Brody is on vacation with a group of friends in Bangkok when they decide to take a skydiving trip. They all land on a pirate-infested island, and are taken prisoner by a pirate lord named Vaas. Vaas plans to extort ransom money from their parents, then sell them into slavery. With the help of his older brother Grant, Jason breaks out of captivity, but Grant is killed in the escape. Jason is rescued by a man named Dennis, who is part of the Rakyat, the island natives who suffer under the boot of the pirates. The leader of the Rakyat, a priestess named Citra, initiates Jason into their tribe and he is given warrior tattoos. He runs a series of missions where he rescues his captive friends one by one (excluding only Grant's girlfriend Daisy, who is discovered to have also escaped) while simultaneously helping the Rakyat retake their island, helped at times by Dr. Earnhardt, a man who is an expert on fungi and various native remedies and drugs. Throughout the adventure, Jason matures into a fearsome warrior and is revered by the Rakyat, though his old friends are disturbed by his transformation into a killer, especially when he contemplates staying on the island permanently.
After tracking down and killing Vaas, Jason then moves on to the southern island, which is controlled by Hoyt Volker, a slave trader and Vaas' employer, swearing to Citra that he will kill Hoyt for what he did to both the islanders and his brother. After Jason kills Hoyt and rescues his younger brother Riley, he returns to find Dr. Earnhardt's house on fire. He looks for survivors and finds Dr. Earnhardt lying in a patio mortally wounded. He tells Jason before dying that he tried to save Jason's friends but they were taken by Citra and her warriors back to the temple. He returns to Citra to find that she has taken his friends captive. She has become absolutely enamored with him, seeing him as the reincarnation of the Rakyat's mythical warrior ancestor. After Jason walks through a hallucination, the player must then choose whether to execute his friends and remain with Citra or save them and leave the island.
If the player chooses to join Citra, Jason executes his friends and has sex with Citra. Just after it, Citra stabs him, saying that their child will lead the tribe, and that he dies as the warrior he has become. If the player chooses to save Jason's friends, Jason comes to his senses and saves his friends from execution. Citra attempts to convince Jason to stay by claiming his friends will move on, and that he should stay in the jungle and become king. Jason states that the violence is over and that there will be no more blood. Dennis arrives claiming that Citra saved him and the other followers. He attempts to kill Jason for betraying Citra, but Citra moves in front of Jason and is stabbed, mortally wounding her. Citra tells Jason she loves him and begs him to not leave before she dies, with Jason sadly apologizing to her. Dennis, shocked at what he has done, breaks down in tears over Citra's body. Soon, Jason and his friends leave the island by boat. Jason narrates that he cannot come back from what he has done, as he believes he is a monster and feels the anger inside him, though he also believes that there is still somewhere inside him that is more and better than that.