The game follows Michael 'Mike' LeRoi, a normal man turned into an undead voodoo warrior known as the Shadow Man, who serves as a semi-willing slave to a voodoo priestess called Nettie and must fight the forces of darkness that dwell in the Deadside or limbo, where all souls go after death. In his former life, Mike was a college dropout who worked as a cab driver. When Mike witnesses the death of one of his passenger's in a gangland shootout one night, he decides to take the dead gangster's suitcase full of money and return home to New Orleans to hide. Unfortunately, the gang discovers his identity and, in retaliation, tracks down and murders both his parents and his baby brother Luke. In desperation, Mike turns to a local voodoo priest for help. However, he turns Mike into the Shadowman and enslaves him to work for him as his own zombie hitman. Mike finally gets somewhat of a break when a powerful and more benevolent voodoo priestess called Mamma Nettie frees him from the priest's control and becomes his new master taking him under her wing. Mike accepts this fate as righteous punishment for causing the death of his family and decides to keep the teddy bear his little brother loved the most to always remember them. Although the protagonist's backstory has certain relevance to the plot, the game only references it, instead of actually explaining it. This becomes an issue even for the fans of the Shadowman comic book because the game is only loosely based on the comics and changes many aspects of the original story including the main character's background.
The game is loosely based on the Garth Ennis' run of the Shadowman comic book series. The series was originally created by writers Jim Shooter and Steve Englehart and artist Mike Manley for Valiant Comics in 1992 and it quickly became a huge hit for the company. Unlike in the game, the protagonist of the comics was a sax player named Jack Boniface, while Nettie was simply his housekeeper who knew a lot about voodoo and helped him come to terms with what he had become. Later, writer Garth Ennis and artist Ashley Wood took over the franchise and changed many things to make the comics much more darker. This run of the Shadowman comic is colloquially known as the Acclaim universe or Shadowman V2. The series now had a new protagonist called Zero who was more of a zombie hitman. The tone of the comics shifted as well due to Ennis' greater focus on Voodoo mysticism and overall horror. This run also introduced the benevolent Irish snake demon who serves as Nettie's familiar.
Some of the villains the Shadowman faces in the game are based on real people and mythological concepts. Legion is based on the demonically possessed man from the Bible that Jesus meets on his journey. Victor Batrachian shares many similarities to the infamous Nazi war criminal Josef Mengele. Jack the Ripper was the nickname given by the papers to the notorious serial killer who murdered several prostitutes in Victorian London and was never identified or caught.
The game has numerous references to the classic late 1960s rock band The Doors. Two most noticeable include Victor Batrachian calling himself "The Lizard King", which is a phrase popularized by The Doors, and the armed Vietnam veteran turned serial killer that Mike meets in prison quoting a line from The Doors' song 'The End.' Additionally, when Mike defeats him, a tune containing some notes from the song begins playing.