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This article contains plot details.
Spyro's new adventure begins sometime after the defeat of Gnasty Gnorc, during a rainy period in the Dragon Realms. Frustrated by the lack of sunny weather, Spyro gets the idea to go to Dragon Shores, an amusement park. However, they instead ended up in Avalar.
As soon as Spyro and Sparx arrive, they meet Elora, the Professor, and Hunter. Immediately afterwards, Avalar's would-be dictator, Ripto, shows up and blasts the portal that the duo came out of. Outraged at seeing a dragon there, Ripto yelled that he hated dragons and left, saying that he'd deal with them later.
Along the way, Spyro collected Avalar's magical talismans and took down Ripto's bodyguards, Crush and Gulp. After escaping once and seemingly dying the second time, Elora told Spyro he could relax for a while. However, Spyro instead followed her to Avalar's last realm.
As it would turn out, Ripto was still alive and had locked everyone out of the realm's castle. This time, Spyro had to collect enough orbs to unlock the door to the castle and challenge Ripto. Using powered-up orbs, Spyro and Ripto did battle. Eventually, both took to the sky with the power of the orbs and Spyro emerged victorious.
After Ripto's defeat, Spyro and Sparx were finally able to go to Dragon Shores. In the game's epilogue, Spyro returned to Avalar sometime later. While there, he missed his chance with Elora and one of his dragon friends decided to use Ripto as a new toy.
The hero of the Dragon Realms, all Spyro wants to do is take a vacation. However, he must do battle with Ripto and his minions before he can head to Dragon Shores.
Sparx is once again by Spyro's side as his sidekick and health meter. Unlike the previous game, Sparx can now eat as many butterflies as he wants. If he eats a special blue one, Spyro will gain a life.
Elora is a faun who tasks Spyro with collecting the talismans throughout Avalar. She also shows some interest in the purple dragon.
One of Spyro's new friends, Hunter starts out as a rival. As the adventure goes on, Spyro gains Hunter's respect.
The Professor has been working with portals for some time. At certain points, he tasks Spyro with collecting a certain amount of orbs.
A stuffy bear who makes Spyro pay to get to certain places, Moneybags lives up to his name.
The main villain of the game, Ripto wants to rule over Avalar and he also happens to hate dragons.
A giant, blue bi-pedal dinosaur, Crush serves as one of Ripto's minions and as the first boss in the game.
A giant, green quadrupedal dinosaur, Gulp is one of Ripto's minions. Gulp serves as the second boss in the game. A mechanical version of him is created in the second stage of the fight against Ripto.
Summer Forest is the first homeworld in the game. As its name suggest, it is set during the Summer season. It features six levels, one speedway, and one boss fight. This homeworld is where Moneybags teaches Spyro to swim. In addition, there is a tutorial given by Hunter on jumping, gliding, and hovering.
Autumn Plains is the second homeworld in the game. Set during the Autumn season, it features eight levels, two speedways, and one boss fight. This homeworld is where Moneybags teaches Spyro to climb up ladders.
Winter Tundra is the last homeworld in the game. Set during the Winter season, it features four levels, a speedway, the last boss fight of the game, and a bonus level. Each level only rewards orbs as all of the Talismans were collected in the previous worlds. After the fight boss fight is won, the Super Portal is activated and the bonus level, Dragon Shores, can be accessed.
- The working title for the game was "Spyro the Dragon 2".
- This is the first game in which Spyro is voiced by Tom Kenny.
- All three homeworlds are based on seasons, with Spring as the only season that is missing.
- Autumn Plains is the only homeworld in the game to have two speedways.
- Near the beginning of the game, Elora tells Spyro that the Talismans can be used to defeat Ripto. However, in the final boss battle, powered-up orbs are used to defeat him instead.