The canonical ending of Heroes I results in Lord Morglin Ironfist's victory. In the following years, he has successfully unified the continent of Enroth and secured his rule as king. Upon the king's death, his two sons, Archibald and Roland, vie for the crown. Archibald orchestrates a series of events that lead to Roland's exile. Archibald is then declared the new king, while Roland organizes a resistance. Each alignment is represented by one of the game's two campaigns. Archibald's campaign features the three "evil" town alignments, while Roland's campaign features the three "good" town alignments.

If Archibald is victorious, Roland's rebellion is crushed, and Roland himself is imprisoned in Castle Ironfist, leaving Archibald the uncontested ruler of Enroth. The canonical ending, however, results in Roland's victory, with Archibald being turned to stone by Roland's court wizard, Tanir. This event is referenced later in Might and Magic VI: The Mandate of Heaven, with Archibald eventually freed of the spell.