Skullgirls takes place in the fictional Canopy Kingdom, a country reminiscent of 1940s postwar America. In a corrupt and war-torn world, several individuals and organizations seek to obtain an artifact known as the Skull Heart. Once every seven years, the Skull Heart grants one woman's wish. However, if a woman with an impure soul attempts to use the Heart, her wish will be corrupted and she will be transformed into a monster known as the Skullgirl. Hundreds have sought after the Skull Heart, yet none of its wielders have been deemed worthy and spared of its curse.

Seven years following the Grand War, a battle fought between three nations, the newest Skullgirl, Marie, has emerged and begun to terrorize the Canopy Kingdom. The game follows several fighters and their journeys to confront Marie and claim the Skull Heart. Each character has their own motive for seeking the Heart, whether to destroy the artifact or use its power for their own interests.