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The bars are filled by collecting blue "magic potions" attained by kicking little sprites who then drop the potions. The force of this magic depends on the number of "bars" of magic power currently available. Players are able to attack using their weapon, jump and cast spells that hurt all enemies on the screen. Progress is made through the game by fighting through Death Adder's henchmen, including men armed with clubs and maces, skeleton warriors, and knights.

The arcade game breaks, and the characters from within the game flood into the "real world," with the children being chased by the enemies, with the warriors in hot pursuit. The arcade release of the game concludes with a fourth wall breaking end sequence with some children playing Golden Axe at an arcade. After the final battle, the warriors receive a magical golden axe that imbues the player with immortality.

In the Mega Drive/Genesis and PC versions, and also in other ports, the characters also battle Death Adder's mentor, Death Bringer, as the true final boss. Once at the castle they defeat Death Adder, who is wielding the Golden Axe, and save the land. The turtle takes the characters across the sea, and they then fly to the castle itself on the back of a giant eagle. The warriors rescue the inhabitants of the ransacked Turtle Village, which turns out to be situated on the shell of a giant turtle. The last is a longsword-wielding Amazon, Tyris Flare, whose parents were both killed by Death Adder. Another is a male barbarian, Ax Battler, wielding a two-handed broadsword, looking for revenge for the murder of his mother.

The first is a battle axe-wielding dwarf, Gilius Thunderhead, from the mines of Wolud, whose twin brother was killed by the soldiers of Death Adder. Three warriors set out on a quest to rescue Yuria and avenge their losses at the hands of Death Adder. He also finds the Golden Axe, the magical emblem of Yuria, and threatens to destroy both the axe and the royal family unless the people of Yuria accept him as their ruler. An evil entity known as Death Adder has captured the King and his daughter, and holds them captive in their castle. The game takes place in the fictional land of Yuria, a Conan the Barbarian-style high fantasy medieval world.
