Fragile Dreams is set in a post-apocalyptic version of Earth in the near-future. Almost all the world's population has vanished, leaving the surviving buildings and structures abandoned. The game is set in and near the ruins of Tokyo, Japan, where the event that nearly wiped out humanity may have originated.
The protagonist, Seto, is a 15-year-old boy who searches the world for other living humans. He encounters Ren, a silver-haired girl who often leaves behind large, cryptic drawings. Other characters include: Sai, the ghost of a young woman; Crow, a mischievous and straightforward amnesiac boy; Personal Frame (P.F.), a portable computer who loves having conversations more than anything else; Chiyo, the ghost of a little girl; and the Merchant, a mysterious yet merry man who trades various goods. The game's host of enemies mainly consist of ghosts, but also include humanoid robots and security proxies. The main antagonist, Shin, is the AI of a scientist who considers speech to be an inferior means of communication. Various memory items include a greater set of characters, each giving hints to the game's backstory.