Setting About Persona

Persona 4 takes place in the near-future, fictional, rural Japanese town of Inaba, which lies among floodplains and has its own high school and shopping districts. The story's introduction highlights a scandal involving a married politician's secretary with a television reporter. The story progresses to reveal that the television reporter had been found dead in Inaba, along with the death of the student who found the body, with no clues to the cause of their deaths. The community maintains a close-knit relationship, and these unexplainable "murders" are the main discussion topic of the townspeople. Aside from the talk on the murders, rumors and gossip are also easily spread. One such rumor popular among the town' student population is the existence of one "Midnight Channel" that only appears on rainy midnights.

After experiencing a bizarre dream, the player then discovers that the rumored "Midnight Channel" actually exists as a separate world, accessed by entering a television set. This world is infested with monsters called Shadows, hostile collectives of human emotions. Nauseating fog envelops the TV world, in contrast to the weather conditions of the real world. The player's character is first to possess the power to enter this world, and brings his school friends with him to investigate. Inside the TV world, the player encounters each character's Shadow self, which represents a hidden side of the personality of the person it imitates. Rejecting a Shadow causes it to gain power and attempt to kill the character in question; however, by accepting it, the Shadow transforms into a Persona. The game's playable characters summon their Personas in combat to fight Shadows. The characters discern that there is a connection between the recent murders and the Midnight Channel: someone is kidnapping people and throwing them inside the TV world, causing their Shadow self to appear on the Midnight Channel before it claims their life. The next person to be kidnapped is found to be Yukiko Amagi, a classmate of the Protagonist. To rescue her, and find the culprit behind the kidnappings and murders, the Protagonist, Yosuke Hanamura, and Chie Satonaka form the Investigation Team.

The design of Inaba is based on a town on the outskirts of Mount Fuji. Its rural design was a source of conflict between Persona 4's developers, as "each staff member had their own image of a rural town", according to director Katsura Hashino. The entire staff went "location hunting" to determine Inaba's design. Inaba does not represent a "a country town that has tourist attractions", but rather a non-notable, "'nowhere' place". Hashino described the town as being "for better or for worse…a run-of-the-mill town". Unlike other role-playing games, which may have large worlds for the player to explore, Persona 4 mostly takes place in Inaba. This reduced development costs, and enabled Atlus "to expand other portions of the game" in return. A central setting also allows players to "sympathize with the daily life that passes in the game." To prevent the setting from becoming stale, the development team established a set number of in-game events to be created to "keep the game exciting."