Many years have passed since Kratos, Spartan warrior and former Greek God of War, took his vengeance against the Greek Gods, and he now lives with his young son Atreus in ancient Norway in the realm of Midgard. The game begins after the death of the Jötunn warrior Faye, Kratos' second wife and Atreus' mother, whose last request was for her ashes to be spread at the highest peak of the Nine Realms. Kratos and Atreus prepare a funeral pyre for her, mourn her death and soon go on a hunt as per Kratos' desire. However much to Kratos' disappointment, Atreus proves his incompetence and lack of focus, making Kratos reconsider taking Atreus in his journey. Kratos is soon attacked by a mysterious stranger with godlike powers, and who cannot feel anything physically. After seemingly killing him, Kratos reluctantly takes Atreus with him and begins their journey.

Kratos and Atreus soon encounter many hurdles in their journey and fend them off. They also meet the Dwarven Huldra brothers, Brok and Sindri who upgrade their weaponry throughout their journey, and a mysterious but friendly Witch of the Woods, who also provides help in her own way after they save her boar, which Atreus accidentally shot. Reaching the Lake of Nine, Kratos and Atreus encounter the friendly World Serpent, Jörmungandr, the last remaining giant. After running into impenetrable black mist which can only be extinguished with the Light of Alfheim, they receive aid from the Witch to use the Bifröst in order to travel to Alfheim and secure the Light. Upon vanquishing the mist and reaching Midgard's peak, Kratos and Atreus find out the Stranger who attacked them is alive and has two henchmen, the sons of Thor, Magni and Modi at his side, interrogating an imprisoned man, revealed to be Mimir.

After they leave, Kratos and Atreus confront Mimir, who reveals the Stranger as Baldur, an Aesir and son of Odin who is the paranoid All-Father and king of Asgard. Mimir also reveals that the highest peak of all nine realms is actually in Jötunheim, but access there has been blocked off by Odin and Thor. Mimir, however, knows of another passage. He instructs Kratos to cut off his head and have it revived by the witch, revealed to be the Vanir goddess Freya. Kratos immediately distrusts her, but both Freya and Mimir warn him to tell Atreus about his true nature as a God, which Kratos keeps a secret from him.

While searching for the components to open Jötunheim's portal, Kratos, Atreus, and Mímir's head are attacked by Modi and Magni. After Kratos kills Magni, Modi flees, but later returns and ambushes them. Kratos fends him off, but Atreus collapses ill due to a mental contradiction of a god believing himself to be mortal. Freya instructs Kratos to retrieve the heart of a particular troll in Helheim; however, his Leviathan Axe is useless there. Kratos returns home to unearth his old weapons, the Blades of Chaos, and is haunted by Athena's spirit. After retrieving the heart, he has a haunting vision of Zeus. Atreus is cured, and Kratos tells him he is a god. Atreus then becomes increasingly arrogant on their journey, and he murders a weakened Modi, despite Kratos ordering him not to. At Midgard's peak, they are ambushed by Baldur. Atreus foolishly picks a fight with Baldur, who then proceeds to destroy the portal to Jötunheim and throw the group into Helheim.

Atreus makes amends with Kratos, and while escaping from Helheim, they discover Baldur is Freya's son. Desperate to protect him, Freya had cast a spell on Baldur that makes him immune to all physical and magical threats, but also makes unable to feel any joys of life, causing Baldur to resent his mother. Returning to Midgard, Mímir realizes there is another way to reach Jötunheim, but he needs his missing eye. After obtaining it from inside of Jörmungandr, who inadvertently swallowed it when he ate Thor's statue, they are attacked by Baldur again, but Freya intervenes in an attempt to protect her son. During the fight, Baldur is pierced by Atreus' mistletoe arrow, breaking Freya's spell.

After an enormous battle, Baldur is defeated, and despite being given an opportunity to retreat, he attempts to strangle Freya, forcing Kratos to kill him. A grieving Freya swears revenge and taunts Kratos about hiding his true nature. Kratos finally tells Atreus about his past and how he had killed his fellow Greek gods, including his father Zeus. Atreus laments and Kratos tells him that they should learn from their experiences and not repeat the mistakes of their predecessors. Freya leaves with Baldur's corpse in silence, and Mímir hopefully suggests that she will eventually move on and learn Kratos did the right thing.

After finally arriving in Jötunheim, they find a temple with a mural depicting their adventures, showing the giants had foreseen everything that would happen and vaguely foretold what was to come. In addition, they discover Faye was a giant who decided to stay behind in Midgard, making Atreus part giant, god, and mortal. Their fight with Baldur was shown, revealing he was after Faye the whole time, unaware she was deceased. It is also revealed that Atreus was named Loki by his mother. Kratos and Atreus then fulfill their promise and spread her ashes at the peak, overlooking a valley of giants' corpses. Afterwards, Kratos reveals to Atreus that his given name was that of a compassionate Spartan comrade. Returning to Midgard, Mímir warns them that the three-year long Fimbulwinter began, meaning Ragnarök is soon to follow—which was not supposed to occur for another hundred years.

In the game's secret ending, Kratos and Atreus return home and slumber. Atreus has a vision that Thor will arrive at the end of Fimbulwinter to confront them.