Dragon Quest V begins with a brief scene of the Hero's birth in which the player gives the Hero a name. After that scene, the Hero finds himself in a room onboard a ship with his father, Pankraz. After the ship stops at Vista Port (ビスタ ,Bisuta?), they leave the ship for Santa Rosa, where Pankraz's friend Sancho lives. Upon arrival, the Hero meets Bianca. After exploring the cave behind Santa Rosa, he and Pankraz accompany Bianca to her town Alkapa. Upon arrival at that town, Bianca and the Hero explore the haunted Uptaten Towers (Castle Lenoire) (レヌール Renūru), where they obtain a mysterious Golden Orb. Afterwards Pankraz and the Hero return to Santa Rosa, along with a Great Sabre Cat , a monster that was saved from bullying by the Hero and Bianca.
The next day, the Hero notices a man in the town who looks very similar to him. That man asks the Hero to show him the Golden Orb and, after returning it, asks him to take care of his father Pankraz. Elsewhere in town, he finds the spirit of Honey (Bella), who asks him to return with her to her country, the snow-covered land of Faerie. Upon arriving there, the two defeat the Queen of Ice to allow Spring to return to the land. After accomplishing this feat, the Hero, Pankraz, and the Great Sabre Cat travel to the eastern kingdom of Coburg ラインãƒãƒƒãƒˆ (Rainhatto ?), where the Hero befriends Prince Harry ヘンリー (HenrÄ« ?). However, Harry is kidnapped, forcing the Hero and Pankraz to rescue him. Once the Hero finds Harry in a nearby hideout, they are attacked by a duo of powerful monsters, which Pankraz defeats, but then a third entity appears and threatens the Hero's life, forcing Pankraz to surrender. In the process, Pankraz is killed by powerful monsters, the Golden Orb is destroyed, and the Hero and Harry are sold into slavery.
The story continues ten years later, and the player finds that the Hero and Harry have grown up working on a giant temple. They get into a scuffle with the guards after seeing a girl named Maria (マリア ,Maria?) being whipped; the three of them are released from the temple and sent drifting to convent near the casino town of Oracleberry (オラクルベリー ,Orakuruberī?) by Maria's brother. Here the Hero and Henry discover that Santa Rosa has been destroyed by the armies of the Queen of Coburg, who has been acting as regent for Harry's brother Wilbur (Dale). Upon paying a visit to his homeland, Harry discovers that his mother has been replaced by a monster. After unmasking the fake queen using the mirror of Ra and defeating the monster, Harry and Maria marry and become advisors to the king.
Afterward, the Hero will travel to the western continent, where he will meet up with Borongo once more, and travel to the town of Salabona, where the wealthy nobleman Roberto (Ludman) and his daughter Nera live. He sends the hero on a quest to retrieve two magic rings of fire and water as a test of his worthiness as a suitor for Nera. The Hero is able to accomplish this task only with the aid of Bianca, who he meets in a nearby village. Afterwards, Roberto offers the Hero the chance to marry Nera, but it is also possible for him to marry Bianca instead. (In the DS Remake, the hero can also marry Roberto's other daughter, Debora as well)
After the marriage, the Hero takes his bride through a great mountain path that leads to his homeland of Gotha (Granbania). Upon their arrival, Sancho is shocked to see the Hero and his wife, and immediately takes them to see the current King of Granbania--Ojiron, younger brother of Pankraz. The Hero must undergo a Royal trial before he can assume the throne, while his pregnant wife rests. During the coronation celebration, the Hero's wife is kidnapped, but the newly born twins are safely hidden.
The Hero rushes to save his wife, but upon defeating the powerful monsters who kidnapped her, both the Hero and his wife are cursed and turned into stone; they remain this way for eight long years.
The Hero is found by his two children and Sancho in the garden of a wealthy man's estate, and is revived and taken back to Gotha castle. They still have not found his wife, but they have a lead on the whereabouts of the Hero's mother: she was from the town of Elhaven on the continent north of Gotha. The Hero goes there, finds more information, and procures a magic carpet. Travelling the world to collect the legendary "Heavenly" or "Celestial" armaments for the Legendary Hero, it is discovered that the Hero's son is indeed the Legendary Hero sought by Pankraz almost twenty years ago.
During this stage of the journey, the Hero avenges Pankraz by killing Ladja Gema (ゲマ ,Gema?), and restores the Dragon God, as well as Zenithia castle, to their proper homes in the sky. To accomplish this, the Hero has to enter a time warp to retrieve the Golden Orb from his child self. The Hero, older and wiser, attempts to talk Pankraz out of going to Reinhart to his demise, but Pankraz does not heed the warning.
After returning to the temple the Hero helped build as a slave, the Celestial armor is found, as well as the statue of his wife. After the final source of evil is eradicated from the world, the party is told that Mada (Martha) remains in the Demon World, and that the final source of evil, Nimzo Mildrath (ミルドラース ,MirudorÄsu?), is lying in wait for the Legendary Hero. The Hero, his wife, and their children agree not to leave Mada in the demon world, so together they travel there via a portal near Elhaven, and reach the Evil Mountain.
Mada is found inside, but dies shortly after meeting the Hero and his family. The party continues on to confront and destroy the lord of evil, Nimzo. They return to Gotha, and have a joyful party. As the family celebrates, Pankraz and Mada watch their son and his family from the heavens, happy and content with their progeny.
After beating the game, players can gain access to the bonus dungeon. Dragon Quest V was the first Dragon Quest game to have a bonus dungeon (although the remakes of Dragon Quest III and IV added bonus dungeons later).