The story of Final Fantasy Type-0 takes place in the world of Orience dominated by four nations empowered by four Crystals that give each nation unique characteristics. The story follows Class Zero, a clandestine class of Agito Cadets from Akademeia, the magic academy from the Dominion of Rubrum that exists under the protection of the Vermilion Bird Crystal that blesses its cadets with the ability to use magic. Class Zero is unique, as they can use this mystical power independent of the Crystal, and thus are a great asset in the war against the Militesi Empire that seeks world dominion. Class Zero is a project by Archsorceress Arecia Al-Rashia, who wants to see the cadets become Agito, the fabled savior of Orience said in ancient prophecy to arrive at the end of the world.
In Tem. XV, 832 RG, Imperial Marshal Cid Aulstyne usurps the Emperor of Milites. Ten years later, he simultaneously mobilizes the Militesi forces towards the Lorican Alliance's capital Berith and the Dominion of Rubrum. A special unit led by White Tiger Secundus l'Cie Qun'mi Tru'e is dispatched directly to Akademeia for a sneak attack on the Vermilion Peristylium.
The Militesi forces use a crystal jammer to disable the dominion's crystal-powered shields and render its legionaries unable to use magic. Meanwhile, Qun'mi targets the Vermilion Bird Crystal directly with the Dáinsleif magitek armor, which is equipped with a second crystal jammer.
As the battle seems lost Class Zero appears—still able to use magic—and turns the tide of the battle. Class Zero's involvement in the liberation effort was kept under wraps until the last moment, and when word arrived the cadets are to take down the crystal jammers it becomes pertinent to link them to Operation HQ. A dominion legionary, Izana Kunagiri, is deployed to deliver a COMM to the cadets, and while he succeeds he perishes amid the battle. The cadets liberate Akademeia by destroying the crystal jammers and driving Qun'mi away. Even if the dominion defends their capital all remaining regions are occupied by the empire, and news arrives the Lorican Alliance has been obliterated by an Ultima Bomb.
Impressed with the cadets' prowess and their ability to use magic independent of the Vermilion Bird Crystal, the administration has Class Zero enrolled in Akademeia with two new members, Rem Tokimiya and Machina Kunagiri. Dr. Arecia Al-Rashia, Akademeia's doctor and archsorceress who had adopted the original twelve cadets and augmented them to be able to use magic without the Crystal, disdains the two newcomers, deeming them inferior to her children. She asks the others to conceal the truth about phantoma from the pair, the mystical life energy of all living beings. Only the Sorcery Division of Akademeia and Class Zero are privy to details about it, the cadets collecting phantoma on the battlefield from felled foes.
It is decided that Agito Cadets are to partake in the war effort to reclaim the areas conquered by the empire, and they thus come under Central Command's jurisdiction. Kurasame Susaya is appointed Class Zero's commanding officer with Moglin as the class moogle who helps them during missions.
The Crystals of Orience remove the memories of the dead from the living, and thus Machina has lost all memory of his brother Izana. Still aware of his loss, Machina tries to learn more about Izana's death, but finds the details of his deployment are confidential. Ace, one of the Class Zero cadets, overhears his mother Arecia arguing with the commandant of the dominion legionaries over Izana's deployment that had been done without the commandant's authorization, apparently only because Ace had requested it. Puzzled, as memories of Izana have been erased from Ace as well, he is unable to bring himself to tell about this to Machina. Later, Ace learns he had befriended Izana over their mutual fondness for chocobos and had asked Izana to lend him a hand during his first official deployment.
The dominion reclaims their territory one town at a time with the passive support of the Kingdom of Concordia, home to the Azure Dragon Crystal. During the battle to reclaim Togoreth the empire deploys the White Tiger Primus l'Cie Nimbus as a last resort, and as a shock move the Vermilion Bird Crystal deploys its own Primus l'Cie, Lord Zhuyu. Zhuyu asks Nimbus whether what he is doing is really the Focus given by the White Tiger Crystal, but Nimbus rebuffs him and the two cross blades. The ensuing battle obliterates Togoreth, leaving but a molten crater behind.
In truth, the empire has subjugated the White Tiger Crystal with a machine engineered by Cid Aulstyne, and thus enslaved its l'Cie who are unable to defy the marshal's orders. The empire is now on a quest to subjugate the rest of Orience's Crystals, already having recovered the Black Tortoise Crystal from the ruins of Lorica. Cid posits that living under the Crystals' "guidance" is but a form of slavery and wills for Milites and its population to collectively become Agito and herald Orience to a new era, though the people in other countries view his use of the term a mere propaganda tool.
Rem suffers from an incurable illness that will eventually kill her. She conceals this from everyone, especially her childhood friend Machina, wishing to remain and fight until the end. She visits Dr. Arecia for medication, but is told her time is nearing its end. Machina senses something wrong with her, but whenever he asks she lies that she is fine, worrying him further.
The dominion receives intel of a new magitek armor (MA) prototype and Class Zero is dispatched to destroy it. They infiltrate the imperial magitek facility and destroy Brionac, a prototype MA designed to deploy the empire's Ultima Bomb to long-distance targets. Nimbus appears to neutralize Class Zero and the cadets find themselves outmatched until he suddenly ceases his attack. A ceasefire is called as Queen Andoria of Concordia invokes the Fabula Pact, an ancient peace agreement made between the nations' peristylia rather than their governments. As the pact is invoked the Vermilion Bird l'Cie Zhuyu and Caetuna note a change in their Crystal. As Cid sees the White Tiger Crystal defying him he only wryly remarks it being "quaint".
The Crystal-States' leaders—Cid Aulstyne for the Militesi Empire, Chancellor Khalia Chival VI for the Dominion of Rubrum, and Queen Andoria for the Kingdom of Concordia—meet in Ingram, the Militesi capital, for peace negotiations. Class Zero is given a guest residence where the queen pays them a visit. The cadets decry the ceasefire, deeming the empire has no right to ask for peace for being the initial aggressor. The queen says that peace is the Will of the Crystals, and the cadets' opposition would only lead to Tempus Finis, an apocalyptic calamity spoken in legend. The cadets struggle to come to terms with the idea that what they have been fighting for is against the Crystals' Will.
The commandant of the dominion legionaries, who has accompanied the chancellor to Ingram, reveals details about Izana's death to Machina to turn him against the rest of Class Zero. He claims its members and Dr. Arecia changed Izana's mission orders to the ones that got him killed. The commandant envies Arecia's coveted position within the dominion and its governing body, the Consortium of Eight, and begrudges her children, Class Zero, have taken the spotlight from his legionaries as the saviors of Rubrum. Because of the commandant's distrust in Dr. Arecia's actions and ignorance of her motives, he tasks Machina with spying on Class Zero, using his affection for Rem to manipulate him in saying that should Machina fail in his espionage, she would take his place.
Class Zero is overrun by Militesi troops in the guest residence and the class orderly, Aria Luricara, is shot by a sniper. During their escape the cadets learn the queen has been assassinated with Class Zero blamed for it. Unable to contact Central Command, the cadets escape with their lives until they encounter the Akatoki Warden Celestia, angered for having failed to protect her queen. Deuce convinces her of Class Zero's innocence, and Celestia helps them flee Ingram to a deserted house in Old Lorica Region.
Machina confronts the others over Izana's death, but is told he should get over it as they have more immediate concerns to worry over: they still can't contact Central Command and it seems they have been purposefully abandoned. Rem tries to calm Machina by explaining Class Zero can't be expected to save everyone despite all their might, but Machina storms off to patrol the area alone, vowing to surpass Class Zero so he can protect Rem. He stays out all night and finally shows up in the morning. The COMM starts working and Kurasame sends an airship to pick the cadets up.
The chancellor and his entourage returned to Rubrum safely after the queen's assassination, but the ceasefire is over and the war is to commence immediately, as the queen's successor, the King of Concordia, has allied with the empire against Rubrum. The Azure Dragon Crystal falls into imperial control, and only the Vermilion Bird Crystal of Rubrum remains. The chancellor informs the other consortium members that the Vermilion Bird Secundus l'Cie Caetuna wills to summon a Verboten Eidolon should the Militesi-Concordian coalition try to invade Rubrum, shocking the other members, as the Crystals—and thus their l'Cie—don't usually partake in mortals' affairs or aid in their war efforts.
Upon returning to Akademeia Class Zero meets an antipathetic front, as the consortium hasn't declared their innocence. Three of the consortium members—the commandant, the cadetmaster and the provost—plan to usurp Arecia, and thus the commandant seizes his chance and plans to deploy Class Zero, including its commanding officer Kurasame, to the frontlines to get rid of them to undermine the doctor's influence. Machina is questioned by the cadetmaster and the provost over his espionage mission, but after the mission to reclaim Eibon he vanishes from Akademeia.
The dominion splits its forces into two, each side accompanied by a Vermilion Bird l'Cie, for the battle against the far greater Militesi-Concordian coalition. Two l'Cie partaking in a war effort is nigh unheard of and many take it as a sign of Rubrum's, and thus the Vermilion Bird Crystal's, desperation. The dominion faces off against the royal army at Judecca, where Lord Zhuyu confronts the Azure Dragon Primus l'Cie Soryu. The new Azure Dragon Secundus l'Cie Celestia—in the form of Shinryu Celestia—confronts Class Zero as the battle seems to favor Rubrum, but is repelled by Bahamut ZERO, an Eidolon summoned by Dr. Arecia.
Meanwhile at the Big Bridge, the forces of Rubrum struggle against the infinite waves of Militesi troops accompanied by a new prototype crystal jammer, which needn't be operated by a l'Cie. Once the crystal jammer is destroyed by Class Zero that had been sent as reinforcements, Lady Caetuna begins summoning the Verboten Eidolon Alexander. As Class Zero retreats they encounter Gilgamesh Ashur, the former Lorican king and a l'Cie who survived the Ultima Bomb. He suffers from amnesia and appears to have lost sight of his Focus. He attacks them out of confusion, but soon departs.
Rubrum's forces withdraw as Alexander obliterates the Militesi army and brings victory to the dominion, but at a heavy cost: Kurasame and many cadets from Akademeia gave up their lives to complete the summoning, and Caetuna entered crystal stasis. The only imperial survivors are General Qator Bashtar whose MA's magic shield was fortified by a new White Tiger Secundus l'Cie, saving the duo from Alexander's Divine Light.
Class Zero returns to Akademeia and visits the cemetery with numerous new graves, but the cadets cannot remember the people they were dug for, not even Kurasame. Machina returns, but his classmates are ambivalent toward him, and Rem is shocked by the change in his behavior. Due to the class's unique nature it is not assigned a new commanding officer, Moglin taking over the duty of hosting lectures and giving mission briefings.
The dominion sets out to conquer Concordia, and as Class Zero proves instrumental in many dominion victories, its reputation is cleansed and the other cadets begin to hail its cadets as heroes once again, much to the commandant's chagrin. As Concordia surrenders, only Milites stands in Rubrum's way of uniting all of Orience under its banner. On the eve of the final battle Rem speaks with Machina, who asks for her reasons for joining the class. Rem says it is because she wants to become Agito, the fabled savior of Orience, and Machina implies he has obtained the power he has been looking for. Instead of accompanying the others to Ingram, he goes missing again.
The final battle takes place in the Militesi capital where Class Zero encounters Qator Bashtar in his new and improved MA, Gabriel. A malfunctioning Ultima Bomb had been fitted into his MA without his knowledge by an imperial engineer who foresaw the imperial surrender and wanted to wipe out the remnants of Milites together with the invading troops. Not wanting to see Ingram destroyed, Qator pilots his MA into the atmosphere where the bomb detonates, saving the city but being caught in the blast himself. Cid Aulstyne watches the explosion light up the sky and realizes Bashtar has perished. He flees the capital and the White Peristylium falls.
Rubrum legionaries briefly celebrate their victory, but as the Vermilion Bird commands all of Orience Tempus Finis commences: the sky turns red and the ocean turns black, and a sanctuary rises from the ocean sending out magitek creatures known as Rursan Reavers who slaughter anyone on sight. The people fight back to no avail: whenever the Rursus are felled they are soon revived to continue their onslaught. Because the Rursus destroy phantoma, those hurt by them cannot be healed with magic. The only way to kill the Rursus is by harvesting their phantoma, something only Class Zero knows how to do; even Lord Zhuyu has fallen to the Rursus.
Class Zero returns to Akademeia to find it devastated by the Rursus and the surviving cadets blaming them for the oncoming apocalypse for the secret code crimson missions the class had undertaken. Rem succumbs to her illness and falls unconscious. She is taken to Arecia's office but her phantoma levels are dangerously low. Central Command and the consortium are gone, leaving the class without orders. Arecia meets with them one last time, explaining the cadets have lived their lives according to the Will of the Crystals, but they alone have the power to make the final choice and write the last page of their own histories. The cadets are left puzzled over the meaning of her words.
Left with the original twelve members of Class Zero, Queen leads the discussion on what to do next. She recites the legend of Agito and Tempus Finis, and reveals Cid Aulstyne has headed to Pandæmonium—the temple that arose from the ocean near Akademeia. The temple is where the Judge is said to reside to make the Final Decision on Orience's fate: if there is no Agito, the world will be destroyed. The cadets decide to head there to speak with the Judge rather than lay low and wait to be killed by the Rursus, even knowing that without Arecia they will not be revived if they fall in battle.
Only those chosen by the Crystals are said to be able to set foot in Pandæmonium, the Land of Judgment, i.e. the l'Cie. The cadets receive the help of Celestia as the Vermilion Bird has no l'Cie left, but in helping Class Zero she has defied the Will of the Azure Dragon Crystal—that would have wanted Celestia to conquer the temple and become Agito instead of Class Zero—and she turns into a Cie'th wyvern.
Pandæmonium is an otherworldly sanctuary cut away from the power of the Vermilion Bird Crystal, but since the cadets draw their magic power from phantoma rather than from the Crystal, they can still use magic. Amid its fiery depths lies the symbol of Etro's gate, the gateway said to lead to the unseen realm, the land of the dead where only departing souls find a way to. The cadets are guided by Cid's voice—having been taken there earlier by a White Tiger l'Cie—who places numerous crucibles on their path for the cadets to prove their worthiness of becoming Agito.
The Vermilion Bird Crystal calls upon Class Zero, searching for new l'Cie, and the cadets can choose to become l'Cie or remain mortal. If the cadets choose to become l'Cie, they fail to save Orience and perish, Arecia deeming it yet another failed experiment, restarts the spiral and Orience and, eventually, Class Zero, are reborn in wait for a new Tempus Finis.
If Class Zero ignores the Crystal's plea and remains mortal, Rem, still slumped in Arecia's office back in Akademeia, is chosen in their stead. The Vermilion Bird sends her to Pandæmonium to intercept a White Tiger l'Cie it had sensed there, wanting its own l'Cie to become Agito. Rem engages the l'Cie but is impaled by his rapier. The l'Cie turns out to be Machina who had inherited Qun'mi's Focus as a White Tiger Secundus l'Cie while he was patrolling the woods alone during the time the class had to escape Ingram. He had wanted the power of a l'Cie to become strong enough to protect Rem, who is now dying in his arms happy to have seen him one last time. As Rem begs Machina to not forget her, both enter crystal stasis.
No matter how hard they try Class Zero fails the final trial, and Cid deems them unfit to become Agito and the cadets are stricken down. Greatly weakened, they push on and happen upon Rem and Machina's crystal, mourning the sight. At the top of Pandæmonium they pass through the depiction of Etro's gate to a void-like area where they come face to face with Cid who has become the Rursan Arbiter, the Judge who decides on Orience's fate.
When Tempus Finis starts when one Crystal controls Orience, the mysterious Rursus Crystal that is of different origin than the other four Crystals, raises Pandæmonium and sends the Rursus to slaughter the people, attempting to form a swarm of souls powerful enough to open Etro's gate so even those still bound to the world of the living could find it. Gala, a mysterious deity-like figure and the creator of the Rursus Crystal, chooses one to be its l'Cie to become the Judge. Though Cid abhors losing his humanity to a Crystal, having devised the war to free Orience from living under the Crystals' power, he is taken over and to his horror realizes he is no longer following his own will.
With their last power Class Zero makes its way to Cid who declares them useless and unworthy of being Agito. With the last of the l'Cie turned to Cie'th or entered crystal stasis, there is no one left to try for the position, and without Agito, the Judge prepares to destroy Orience. Cid transforms into the Rursan Arbiter, challenging the damaged cadets to their final battle. Standing no chance, Class Zero is defeated.
The now sublimated Machina and Rem lend their souls to the fallen Class Zero members who rise again and overwhelm the Rursan Arbiter by harvesting his phantoma. Every time a cadet harvests a piece of phantoma they are struck down, but Rem and Machina's crystal rouses another member until the Arbiter is exhausted and disperses into phantoma that disappears into the void. Tempus Finis is stalled and Class Zero is teleported back into their classroom in Akademeia, which they find in ruins.
The cadets are dying, overexerted from the final battle. Though at first despairing their fate, Ace soothes the others by singing the song Arecia had sung to him when he was young. The cadets spend their last moments discussing their dreams for the future in a world free of war.
Arecia is surprised at the outcome of the final battle and how in this spiral the cadets had chosen to not become l'Cie. She is a fal'Cie of the god Pulse, a deity-like creature, who is the opposite of Gala, the fal'Cie of Lindzei, in finding Etro's gate. Orience is a project where the Crystals created by Arecia try to cultivate prime souls that tempered through warfare would become strong enough to open the Gate. Arecia believes a combination of all the most human traits are needed to make up Agito, the Nameless Tome, an ancient epic extolling the legends of Orience, speaking of "the Sixteen" needed to become Agito. Gala, on the other hand, attempts to accumulate a flood of souls to force open the Gate instead.
Should both these objectives fail, Orience will be destroyed and the spiral restarted, the events unfolding repeatedly until in the 600,104,972nd cycle the twelve remaining members of Class Zero chose to not become l'Cie and prevailed—with Machina and Rem's help—against the Rursan Arbiter as mortals, breaking the spiral. The two "rejected" members of "the Sixteen" from previous cycles—Tiz and Joker—who now work for Arecia as observers, convince her to listen to the cadets' souls.
Arecia learns the class loves her but are satisfied with the decision they made in how they met their end, and do not want to be revived for another cycle. Arecia decides to let the children go and approaches Machina and Rem's crystal asking the two to tell her all about her children, and to always remember them. After releasing the pair from crystal stasis Arecia abandons the project to find Etro's gate with the Agito, and departs from Orience to places unknown. The Crystals' light dims and the people regain their ability to remember the dead.
Machina and Rem return to Akademeia where they find Class Zero dead around a flag made of their capes. At first the two become anguished, truly mourning the deaths of those close to them for the first time, but can do nothing but look on to the future. Orience enters a new era, but without the Crystals mankind must learn to cope without their power. Machina marries Rem and the two become instrumental in rebuilding Orience, cherishing the memories of Class Zero in their hearts until Machina passes away at age 67, his wife by his side.
In an alternate ending Arecia removes the Crystals from Orience's history and the war never happens, allowing for Class Zero and others to enjoy carefree lives. In another secret ending Ace, dressed in samurai armor, is revived by the power of the phoenix at a remote snow-covered shrine. Grasping a fiery plume, he declares "We are here."