At the forefront of a rising tide of violence brought on by Galbadia's war declaration is a SeeD cadet named Squall Leonhart. Serious to a fault, Squall is thought of as being very much a lone wolf.

An encounter with the freespirited Rinoa Heartilly turns his universe upside down. Squall finds Rinoa's carefree attitude fascinating but has no time to ponder these thoughts, for the job of dealing with the sorceress behind Galbadia's hostility has fallen to SeeD and Squall.

However, a chance encounter with the free-spirited Rinoa Heartilly turns Squall's universe upside down; having thrived on discipline, Squall finds Rinoa's carefree attitude fascinating. He also begins to have dreams in which he is Laguna Loire, a soldier from the Garbadian army. In time he will discover that the fate of both himself and the figure in his dreams are inexorably linked.

Meanwhile, a manipulative sorceress continues to guide the hands of the most powerful men in Garbadia. Squall and Seifer are forced to work side by side in a mission to assassinate the sorceress.

Squall attends a military school known as "Balamb Garden". The school is for children as young as six, up to young adults of 19. If a student doesn't pass an exam in their later years, however, they are expelled from the school. One skill that students learn at the school, in addition to combat skills, is magic. Magic is a hard skill to master in the world of FFVIII, and therefore only graduates of Garden are skilled enough to use it.

The countries in the world of FFVIII decided in the past that the graduates of Garden would join a group unaffiliated with the individual countries. Once in this private group, a graduate is obligated to join a foreign government or army, with different level of rankings, depending on whether negotiations had been successfully established between Garden and the foreign country's army. Assignments are made regardless of a graduate's personal wishes.

The highest achieving students of Garden are eligible to join an elite forces group known as "SeeD". Squall is rumored to be an extremely apt student at Garden, and attempts to join SeeD. This again draws many parallels with Cloud, and the First Class ranking he "had" in SOLDIER from Final Fantasy VII. A main character being involved with the military, however, isn't new to the Final Fantasy series. Final Fantasy IV involved Cecil, a captain of a airship fleet, and Final Fantasy VI began with Terra, who was used by an evil empire as a soldier.