The story of Rival Schools introduces the player to a Japanese city called Aoharu City, where several local schools are the victims of unknown attacks and kidnappings of students and staff. The various characters in the game set out to find who is responsible for the attacks on their school, with the cut-scenes and fights portraying their interactions with the other schools and among themselves. Eventually, the story reveals that an elite school in the city, Justice High, is responsible for the attacks. The player's team eventually faces off against Raizo Imawano, the principal of the school, and first boss of the game. If certain requirements are met during the fight against Raizo, the story would continue as the player would then head into a true final boss fight against Hyo Imawano, Raizo's nephew and the true mastermind behind the events of the game. The structure of the single player game of Rival Schools varied depending on how characters were selected. If two characters from the same school were selected (with a few exceptions), single-player would play in a progressing story with fights predetermined beforehand and each fight preceding and ending with short 2D cut-scenes to explain the story. If two characters from different schools were chosen, the single-player mode would instead play similar to other fighting games, with the player's chosen team fighting against random teams of opponents before facing the boss. In the arcade, character selection was initially limited to selecting two characters from the same school and free selection of any character was accessed through time; the PlayStation versions, which included all characters unlocked by default, had no such restrictions.

The story of Rival Schools introduces the player to a Japanese city called Aoharu City, where several local schools are the victims of unknown attacks and kidnappings of students and staff. The various characters in the game set out to find who is responsible for the attacks on their school, with the cut-scenes and fights portraying their interactions with the other schools and among themselves. Eventually, the story reveals that an elite school in the city, Justice High, is responsible for the attacks. The player's team eventually faces off against Raizo Imawano, the principal of the school, and first boss of the game. If certain requirements are met during the fight against Raizo, the story would continue as the player would then head into a true final boss fight against Hyo Imawano, Raizo's nephew and the true mastermind behind the events of the game. The structure of the single player game of Rival Schools varied depending on how characters were selected. If two characters from the same school were selected (with a few exceptions), single-player would play in a progressing story with fights predetermined beforehand and each fight preceding and ending with short 2D cut-scenes to explain the story. If two characters from different schools were chosen, the single-player mode would instead play similar to other fighting games, with the player's chosen team fighting against random teams of opponents before facing the boss. In the arcade, character selection was initially limited to selecting two characters from the same school and free selection of any character was accessed through time; the PlayStation versions, which included all characters unlocked by default, had no such restrictions.