In the aftermath of the War of the Astrals two thousand years ago, Niflheim was one of four countries created from the ashes of Solheim. It was established centuries after the Kingdom of Lucis due to a movement to revive the lost civilization, a global civilization that had lived in harmony with the six Astrals before being overthrown by the god of fire, Ifrit. The Infernian had broken rank from the other Astrals and turned on mankind when the hubris of Solheim led them to spurn their benefactor. Leading the charge was House Aldercapt, whose deeds brought about the rise of the Niflheim Empire. The empire built upon Solheim's magiteknology and employed it for military use.

In M.E. 358 Niflheim, led by its ruling Aldercapt dynasty, declared war to annex neighboring countries,[1] desiring the powers the Astrals had bestowed upon Lucis and Tenebrae[2] and aspiring to recreate the domination of Solheim.[1]

In the year M.E. 359, Niflheim conquered the land of Tenebrae, except the Fenestala Manor, home to the Oracle lineage of House Fleuret, due to the masses' faith in the Oracle.[3][2] In M.E. 501, the imperial army discovered daemons, a life form unknown to them at the time.[1][2] Niflheim's experiments with daemons would in time unwittingly infect their own populace with the Starscourge malady, propagating more daemons to spawn across the globe. In Final Fantasy XV: Episode Ardyn, Verstael hypothesizes that the imperial territory gain is releasing the previously dormant plasmodium responsible for the daemon outbreak from the soil into the atmosphere.

Circa M.E. 606, Niflheim crossed the Cygillan Ocean to engage the Lucian-Accordian Allied Forces, and overwhelmed it with its new weapons, namely, the magitek armors. Accordo surrendered and the Lucian king erected the Wall around the whole of the Cavaugh region that includes the Crown City of Insomnia, and took up a siege position.[3][4] The empire took control of the outlands and turned the fishing village of Galdin into a trading post connecting the Lucian continent with the imperial province of Accordo. Sometime later, Niflheim stopped using ocean routes in favor of airships, and Galdin's importance as an imperial port diminished.

In late M.E. 720, the empire under the direction of Verstael Besithia uncovered Ifrit's slumbering body from the Rock of Ravatogh and preserved him on ice. By the year M.E. 725 the entire world outside of Lucis was under imperial rule, although Accordo was allowed relative autonomy and the Tenebraen royalty still operated freely from the Fenestala Manor. Emperor Aldercapt, the long time ruler, once benevolent and loved by the masses, began the mass production of magitek soldiers for the forthcoming all-out war with Lucis.

The magitek infantry was developed with knowledge of daemons provided by Ardyn Izunia between M.E. 722 and 723. He was made chancellor and became the emperor's right-hand-man, planting the desire in the sovereign's mind to capture the Crystal of Lucis. Ardyn introduced to Research Chief Verstael Besithia the method to procure daemonic miasma from humans to power magitek cores, which would be attached to magitek trooper frames and encased in lightproof armor. Though Verstael thus came to understand the true nature of daemons, miasma and the Starscourge, he seemingly kept the information to himself, as to the general public the mysterious phenomenon of imperial citizens disappearing en masse was simply known as the "vanishing disease".

The Great War between Lucis and Niflheim lasted between February 24-April 1 M.E. 725. Anticipating defeat by Niflheim's new magitek army, King Mors of Lucis, grandfather of Noctis Lucis Caelum, shrunk the magic barrier surrounding the kingdom to Insomnia's outer ramparts to strengthen it.[1] Niflheim breached further into the outlands where they began to build new military bases, and much of the Leide region was destroyed. On M.E. 734, Verstael and Ardyn conspired to bring down Insomnia's magic barrier to invade it, but despite Ardyn taking out various Wall amplifiers the Wall held and their attempt was thwarted after Ardyn was expelled from the city.

On M.E. 744, King Regis of Lucis arrived in Tenebrae with his eight-year-old son, Prince Noctis, for the latter to recuperate from an injury sustained from a daemon attack orchestrated by the empire. During their stay, Niflheim attacked the Fenestala Manor, where the Tenebraean royal family lived, to kill Regis and Noctis. General Glauca murdered Queen Sylva in front of her children, but Regis escaped with his son. The incident was covered up, and the queen was reported to have perished in an accidental fire. The queen's children, Princess Lunafreya and Prince Ravus, fell into imperial custody, though still nominally the leaders of Tenebrae.

In M.E. 745, the military battled the suddenly-awoken Astral Shiva in Ghorovas Rift outside Gralea. Her frozen corpse caused a major climactic anomaly enshrouding the majority of the continent, including the capital city of Gralea, in a perpetual winter. Niflheim lost most of its magitek army in the battle, and began developing magitek soldiers strong enough to fight Astrals.[1] The empire had developed a device dubbed the Wallbreaker Wave to neutralize the magic used by the Lucis Caelum dynasty and even enfeeble Astrals.

Couple years after this the emperor's secret granddaughter was born to his son, as per information given in Final Fantasy XV -The Dawn of the Future-. The emperor's wife had died soon after giving birth to their only child, and the son also later fell in battle. The emperor's changed demeanor from a benevolent ruler into one obsessed with military expansion and acquirement of magic is often attributed to the loss of his wife, but some believe it to be the influence of Chancellor Izunia. Though Niflheim reigned nigh supreme the wealth gained from conquest was not passed onto the imperial citizens; rather, life became drab as playgrounds, cinemas, theme parks and boutiques selling non-essential items closed and all money was funneled into the military and Verstael's experiments.[5]

In the year M.E. 756 Niflheim attacks Lucis during a peace-treaty signing party, which was supposed to settle the dispute and annex the Lucian outlands to the empire in exchange for peace. The invasion was pushed by Deputy High Commander Ravus Nox Fleuret, the former prince of Tenebrae. The treaty-signing was a cover for the true imperial objective: the invasion of Insomnia, the theft of the Crystal and the Ring of the Lucii, and the total conquest of Lucis. Galdin Quay ended up blockaded by Niflheim, preventing all ferry travel to and from. King Regis, his son Prince Noctis, and the Oracle—Lady Lunafreya—are all reported dead, and Ravus loses his arm after attempting to wield the Ring of the Lucii.

In truth, Lunafreya escaped Insomnia with the Ring of the Lucii, and Noctis was not in the city when the attack took place, prompting him to try to rendezvous with Lunafreya and start his quest to restore his kingdom and save the Crystal. After General Glauca's defeat in the battle of Insomnia, Ravus becomes the new high commander of the imperial army, now fitted with a magitek prosthetic in place of his lost limb. He is tasked with capturing Lunafreya and Noctis, but does not follow through; in fact, he secretly helps Lunafreya return to Tenebrae.

Emperor Aldercapt seeks the Ring of the Lucii in Lunafreya's possession, as even though he now has the Crystal, its power cannot be commanded without the ring. The Crystal is a powerful magical artifact whose power of light is unmatched. It had been kept by the kingdom of Lucis for two thousand years, protected by the lineage of Lucian kings. According to legend, the Crystal is of divine origin and was bestowed upon humanity by the Astral god Bahamut alongside the Ring of the Lucii, which harnesses the Crystal's power for a chosen few.

After Insomnia's fall, Niflheim moves to secure the area. They pledge to repatriate displaced Crown City citizens, and call their patrolling of Lucian areas a peace-keeping effort, which involves numerous road blocks. Their true purpose is to find Noctis who travels the Lucian outlands with his retinue. When Titan awakens and calls out to Noctis to forge a covenant with him, Niflheim attacks the Astral. The Archaean disappears from the Disc of Cauthess after Noctis passes his trial, but Niflheim publicizes a version of the events where they averted Lucis from further disaster by quelling Titan's wrath, making themselves out as saviors.

Niflheim raids the town of Lestallum while looking for the exiled prince, which results in General Caligo Ulldor murdering Jared Hester—a loyal supporter of the royal house—in cold blood and Noctis begins demolishing Niflheim's military bases with his friends. He is being aided by Chancellor Izunia, who lets the prince escape after he forges a covenant with Titan, and allows him to reclaim his car from an imperial base. Ardyn hires Commodore Aranea Highwind to help Noctis find mythril from Steyliff Grove. Aranea is skeptical of the empire, saying it has fallen into madness in the last ten years.

Ravus and his magitek army are tasked with felling the Leviathan before Noctis can forge a covenant with her. During Noctis's negotiations with First Secretary Camelia Claustra in Altissia, she reaffirms what Aranea said earlier, mentioning "We've seen the empire go mad these ten odd years." Noctis convinces her to let Lunafreya summon Leviathan, but the sea goddess goes on a rampage through the city, and though Niflheim attacks it from airships it has little impact on the Astral. Noctis forges a covenant with her, quelling Leviathan's wrath, and Lunafreya is killed by Ardyn during the battle. Ravus turns on the empire, kills Caligo Ulldor and unsuccessfully orders Niflheim to withdraw from Altissia. Aranea's Airborne Unit is on task for recovery and clean-up. Without an Oracle to hold the Starscourge at bay nights lengthen faster and the empire begins to crumble under the onslaught of daemons. Ravus is sentenced to death, being used as a scapegoat for the damage Altissia sustained.

As told in Final Fantasy XV -The Dawn of the Future-, the emperor is dying of Starscourge and Ardyn decimates Gralea by unleashing rogue magitek troopers, daemons and a Diamond Weapon upon it. He broadcasts the emperor's final words for the city to hear—his delusions for the rise of Solheim—mocking his desire to become immortal and thus the eternal sovereign of Niflheim. Ardyn declares it the final day of the empire as the emperor has no heir. The emperor's secret granddaughter was evacuated however, and entered into the care of Aranea Highwind whose Airborne Unit evacuates everyone they can to Tenebrae. Aranea herself fells the Diamond Weapon Ardyn was trying to transport.

When Noctis passes through Tenebrae on his way to the imperial capital, he finds Fenestala Manor aflame, destroyed by Niflheim, and the train station full of refugees. He meets Aranea there who tells him of the current state of imperial affairs. The chancellor is in charge as everyone else is gone: the high commander was to be executed, and the emperor is "no more than a husk at this point." She explains that Niflheim is in chaos, with unprogrammed MTs and wild daemons left to run amok. She says it's gotten too far out of hand for the army to deal with, as there is not enough daylight left to keep the daemons in one place.

As depicted in Final Fantasy XV: Episode Prompto, Noctis's friend Prompto Argentum has become estranged from his friends, and traverses the arctic imperial outlands alone. He succumbs to the cold and is taken to a magitek production facility by MTs. He escapes after killing Verstael Besithia and his latest magitek creations. Verstael had come to thirst for world domination after coming to view daemons as the superior life form.

Noctis infiltrates Gralea during his quest to reclaim the Crystal, but finds the place devoid of humans and swarming with rogue magitek troops and daemons. The citizens of Gralea have been killed or turned into daemons and the emperor has been turned into a foras by Chancellor Izunia. Ravus had challenged the emperor and declared his support for Noctis, the one True King. The emperor, exuding miasma, had claimed he is the True King because he has the Crystal, and Ravus was soon murdered by Ardyn posing as Noctis. Noctis comes across his body during his search for the Crystal.

In his death throes as the daemon foras, the emperor laments his desire to rule over both the heavens as well as the earth, revealing his motivation for his quest to kill the Astrals. To his final moments he seeks the Ring of the Lucii to gain the power of the Crystal, under the false belief he could become the Crystal's Chosen and rule the world. Noctis and his friends kill him as well as Ravus when his remains are turned into a daemon.

When Noctis finds the Crystal he is absorbed inside it for ten years, awaiting the day he would return as the True King as spoken of in prophecy. Sunlight gradually vanishes from the world, and what is left of the empire collapses. Survivors migrate to Lestallum, whose power plant provides the town with light to fend of the daemons. Niflheim's recovery effort in Insomnia is halted when the city is overtaken by monsters, though the imperial strongholds remain in the city, the magitek troopers operating on autopilot. With the emperor, research chief, and the high commander of the military dead, and the chancellor missing, Niflheim falls apart.

Final Fantasy XV -The Dawn of the Future- depicts the imperial lands as abandoned, the only people left being the soldiers who have joined the Hunters and the Kingsglaive in safeguarding the world in wait for the True King's arrival. After magic vanishes from the world and the light returns once more, the previously barren Niflheim region becomes fertile.

