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Damnation is set on an alternate version of planet Earth, in the early part of the 20th century after the American Civil War, which had spanned over several decades, where steam engines replace combustion engines. The game sees the protagonists fighting off a rich industrialist who wants to do away with both the Union and Confederacy in one swift movement and turn the United States of America into a country called the "American Empire" with a totalitarian dictatorship.
Damnation centers around a group of freedom fighters led by Captain Hamilton Rourke in a desperate attempt to protect a war torn, heavily industrialized America from a dictator.
During Rourke's adventures, he works with or against a number of characters, including Yakecan, an ally and Indian healer, Jack, a scientist for the enemy, and Professor Winslow, Jack's father. He also works with a shaman named Akahando against the forces of the evil Prescott, an arms dealer bent on the domination of America.