NOTE: This follows the canonical story: all 5 ultimate Personas, Reiji in the party, Good Ending.
The story begins with protagonist Naoya "Nao" Toudou, delinquent Masao "Mark" Inaba, kogal Yuka "Ayase" Ayase, rich kid Kei "Nanjo" Nanjo, bighead Hidehiko "Brown" Uesugi, ojou Eriko "Elly" Kirishima, and ex-yankii Yukino Mayuzumi. Hidehiko is trying to convince everyone to play "Persona", a game that allows someone to see into their future. Mark bets Hidehiko that it won't work, with Elly and Ayase backing up Hidehiko. Mark appeals to Naoya for his decision, which the player can decide. Hidehiko, Mark, Ayase and Elly perform the ritual, and a crying young girl in white appears. First-time players of Persona Nanjo, Yukino, Mark and Naoya are knocked out. Naoya meets a being named Philemon while unconcious.
Naoya awakens in the Infirmary, where Nurse Natsumi and their teacher Mrs. Saeko advise them to go to the hospital for a check-up. Mark decides to take the opportunity to see their sick friend Maki Sonomura. On the way, though, they discover a teacher accusing them of going into the Sealed Classroom on the First Floor, and go there to clear their names. They discover a student named Reiji Kido, who flees the building. The party also speaks to a student who claims that there are gangsters who go in and out of the Abandoned Factory. Another student named Yuko asks them to take a book to Maki, a book named Gate To Paradise. On their way out of school, Nanjo's butler Yamaoka tries to give the party a lift, but is turned away by an embarrased Nanjo.
The party decides to go and inform Reiji's mother that he has been in the Sealed Classroom (and possibly the Abandoned Factory) and end up agreeing to be friends with him. Meanwhile Mark has been talking to his bandmates, the Tailors, who confirm that it is indeed Reiji who goes to the Factory. When they go to see him, however, he runs off again. In the hospital, Mark decides to visit Maki. When they visit her, though, she collapses and is rushed to the ICU. Outside, the hospital begins to shake, and Mark throws open the ICU doors. He discovers that there is only a wall there.
The party heads back to Reception, but on the way there, they discover that Nanjo's butler Yamaoka has followed them to the hospital and has been mortally wounded by zombies. The party battles the zombies and Nanjo says goodbye to Yamaoka. The party heads back to reception, where Naoya and Yukino help a nurse who has become trapped under a vending machine. More zombies attack them, but Elly rushes in and helps with her Persona, telling them that she left Maki's mother Setsuko at the shrine. The party discovers Reiji at a SEBEC roadblock, and Mark stops him from getting himself gunned down.
At Alaya Shrine, the party sees Philemon, and discovers that Takahisa Kandori, branch president of SEBEC, was the one whose men attacked her. The party discovers that they will need a Card Key to enter SEBEC. Nanjo and Mark head for SEBEC, while Naoya, Elly and Yukino take Setsuko back to a heavily guarded St. Hermelin, where she is sent to the Infirmary. The party heads to the Passageway between the Gym Block and the Main Building, which has a hole that is being blocked up. However, they are told to stop in case Mark and Nanjo try to enter that way. Maki then appears, seemingly completely better and with no knowledge of ever being in the hospital. The students suspect that she is a demon, but Yuko states that she is probably not due to having Maki's favourite compact mirror. However, she is slightly strange, wondering out loud if Naoya made the hole. Nanjo enters through the hole and states that Mark has been locked up in the Police Station. The trio head there through the Passageway hole, and Maki awakens her Persona.
In the Police Station, the group take the Cell Key free Mark and Hidehiko, who was also imprisoned there. However, they discover that a demon has replaced the police chief, making Mark sad, as the police chief was something of a friendly arch-nemesis to him. The group, now with an awakened Hidehiko, battle the demon. Hidehiko offers to join, but is sent to safety by Naoya, as is Elly when the party find her in the Subway. It seems that she was looking for a way out, as a massive pink barrier is now covering the town.
Mark also had the Card Key, so the party decides to head to SEBEC. They meet Ayase in the Abandoned Factory, who is turned away by Naoya. The party sneaks into the SEBEC Building, and challenges Kandori, who also turns out to be a Persona-user. The party defeats his henchman and fellow Persona-user Takeda, and follows him into the Underground Lab. They discover a massive device known as the Deva Yuga. It's creator Dr. Nicholai attempts to sacrifice himself to kill Kandori inside it, but Mark convinces Naoya to free the Doctor and Kandori.
The device sends the party to what seems to be their school, but with different-seeming people and six months in the past. There, they meet Yosuke Naito, who seemingly eloped with his girlfriend Chisato Kasai. In truth, they were both lured into this other world by a little girl in black named Aki. Maki reveals that she is the Maki of this world and not the one from the hospital. Aki's voice sounds in the school, telling them that she has blocked all the exits and filled the school with demons. The party discovers Reiji in a classroom, and he forcibly joins when he discovers that Kandori is there. Nanjo discovers that he was the boy sent to the great divide between dimensions by Kandori, and Reiji says that he ended up here. The party heads to the courtyard and battles Aki's robotic rat Tesso, opening the exits.
The party head to the Library at Yosuke's request, and discovers a gigantic door. The normally-gothic Tsutomu Kurouri tells them that he was told about the door by a gentleman at the shrine, who turns out to be Philemon. At the Shrine, Philemon tells them about the two worlds and sends them to look for the Expel Mirror. They need it to defeat demons in the subway, which is the only way to Kandori's half of the town after a gigantic wall appeared in the middle. The party goes to the Historical Society, and discovers a little girl's face inside the mirror, begging them not to take it. They ignore her and use it to get inside the Subway and battle the monster Yog-Sothoth Jr. When they leave, they discover that the only way through this side of the town is through the Black Market, where everyone worships the "Harem Queen".
Now trapped inside the Black Market, the party goes through the Karma Palace to ask the Queen to free them. On the way, they discover a servant of the Queen showing off Chisato's painting, claiming that it is the Queen's. The party comments on how it is a good painting at first glance, but the artist's emotions are missing, making it seem fake. The Queen turns out to be Chisato, who warps the party away with her Chaos Mirror. When they get back, they discover that every time she uses the Chaos Mirror, she gets another mole. She turns Reiji, Nanjo, and Mark into stone and taunts Maki about her affections for Yosuke. She then shows Maki's painting, and asks Naoya whose is better.
Naoya replies that Maki's is better, and Chisato gets angry at him. Aki appears and tells the Queen that if she kills Maki and Naoya then all her moles will go away. The Harem Queen is defeated by the duo, and Aki tells Chisato that she was lying. Just then, Yosuke arrives, having discovered Chisato's identity. Chisato decides to stop being the Harem Queen, and the Chaos Mirror breaks, clearing up her moles and turning everyone back to normal. Chisato tells the party where Kandori is - in the gigantic Mana Castle. The party heads there, and meets Aki outside, taunting them that they cannot get in without a Compact.
The party goes to the Lost Forest, and makes their way to a Gingerbread House. Once there, they discover a little girl, the same one as in the Historical Society. She introduces herself as Mai. Naoya convines Mai to give them her wishing-granting Compact Half by telling her that he is fighting to save everyone and that she cannot run away. The group heads back to the Mana Castle, and Nanjo begins to have doubts about opening the doorway. The Compact disappears when entered into the slot, allowing Kandori to take it. However, he underestimates them and opens the door anyway. The group head for his throne room, where it is revealed that Reiji and Kandori are half-brothers. Kandori takes control of the old world, and teleports back there to turn the SEBEC Building into a castle.
The party defeats Saurva, who Kandori left behind to kill them. They discover that the Haunted House has a way back to the old world, so they head there. Maki realizes that it is where she used to like playing as a child, but it was knocked down and replaced with the SEBEC Building in the real world. They discover Hariti there, a twisted form of Maki's mother. The group lower their weapons and Hariti turns back into Setsuko. She uses technology to warp them back into the other world, into Castle Deva Yuga. Dr. Nicholai is there, and has become nihilistic like Kandori. The party follows Kandori up to the top room, and discovers that he now has nothing to do now that he has achieved his dreams. He discovers that the party's dreams are better than his, and is ready to give up until Nanjo makes a speech to him.
The party fights Kandori, who is suddenly taken over by his Persona. They defeat both his forms, and he is freed from his Persona Nyarlathotep's control. He tells everyone that the sickly hospitalized Maki is actually sustaining the other world, as an utopia for herself, through the Deva Yuga. In addition, when she doubted what she was doing, she created Mai and Aki. She also created the party's Maki as an "Ideal Maki". Maki, unable to accept this, runs off. The party follows her to a Hospital Room, where they discover her body lying on a hospital table. Aki taunts her, and when Aki vanishes, Maki goes to the large Chaos Mirror at the other end of the room and disappears. Reiji relates his own issues to Maki's, and she appears to hear this and is convinced. The party receives a Broken Compact and a Green Compact, along with a Chaos Mirror Shard.
The party is transported to the Lost Forest, where they discover Setsuko and Mai. Mai tells them where to find Maki, and the party goes to the room where she is. The Broken Compact and the Chaos Mirror Shard become the Red Compact. The party discovers her with a large blank mask covering her face, and with a wish to die. Nanjo convinces her not to kill herself after Naoya tells her not to run away. She joins the party again, the mask disappearing. They are transported back to the Gingerbread House, where Mai tells them that they must go to the Alaya Shrine.
Inside the Alaya Cavern, Naoya and Maki (now alone) find another self of Naoya who shows the real Naoya memories of him saving the nurse, helping Dr. Nicholai, defying the Harem Queen, not fighting Hariti, telling Kandori his reason, and convincing Maki not to run away. He is rewarded with the Totems for the five Ultimate Personas - the Babylonian Coffin for Reiji, the Rosetta Stone for himself, the Amber Glasses for Nanjo, the Purified Water for Mark, and the Pasque Flower for Maki. On a lower level, the party discovers the Real Maki, who says that she wishes that the Ideal Maki was the real her. With some convincing, she decides to face reality and gives them the Blue Compact.
The party returns to school and unlocks the gigantic library door while Chisato and Yosuke watch, agreeing to go to the theme park Dreamland after it is all over. They make their way through Avidya World, a twisted version of St. Hermelin. At the end, they discover Pandora, a self of Maki who is planning to create a world of silence. They fight her and convince her not to use the Deva Yuga she has, as it is not a Gate To Paradise, but a Pandora's Box that will release evil into the world. She decides to combine with Maki again. Maki sends Reiji, Mark, and Nanjo back to the real world, lamenting that she cannot go with them. She kisses Naoya before he disappears and meet Philemon briefly.
The final scene of the game shows Maki, now reunited with Aki, Mai, Ideal Maki and Pandora, and the rest of the party in PEACE Diner, preparing to go to Dreamland. Maki briefly enters the school to look at her Compact, the last thing Pandora left behind.