After winning the decisive battle of Katze Plains and securing the fortress city of E-Rantel, the undead sorcerer Ainz Ooal Gown has formally established the Sorcerer Kingdom, a new nation ruled by himself as its absolute monarch. His declared vision is an eternal utopia where countless species kneel before him and coexist under his dominion. The manga follows his efforts to transform that ideal into a concrete reality through statecraft, diplomacy, and military expansion.

The story proceeds in several major arcs. In the first, Ainz visits the Adventurer's Guild in E-Rantel and meets its master, Plauton Ainzach. He proposes strengthening and centralizing the guild as an arm of the state, using adventurers as a tool for propaganda, intelligence gathering, and talent recruitment. To extend this influence abroad, Ainz travels to the Baharuth Empire with Ainzach. There he encounters the colossal imperial colosseum and its operator, Osk, and agrees to fight the colosseum's champion, a warrior known as the Martial King. The fight is a one-sided demonstration of Ainz's overwhelming power, which further cements his legend and intimidates the empire's ruler, Emperor Jircniv Rune Farlord El-Nix. Jircniv, already wary of Ainz after the fall of the kingdom, misreads Ainz's every move as part of a grand scheme and desperately seeks countermeasures, inadvertently entangling himself deeper in Ainz's orbit.

In the next arc, Ainz learns of the existence of rune magic, a native system distinct from Yggdrasil's magic. Seeing it as a potential link to his former world and a valuable asset, he journeys to the Dwarf Kingdom in the northern mountains. He brings Shalltear Bloodfallen as his companion, intending to use her intimidating presence for leverage. He finds the dwarf kingdom in ruin, its capital overrun by the Quagoa, a race of intelligent mole-like creatures, and its surviving leaders huddled in desperation. Ainz negotiates with the dwarf regency council, exploiting their weakness to secure favorable terms, and then leads a campaign to retake the capital from the Quagoa and a frost dragon that lairs there, fulfilling his side of the bargain.

Key characters include Ainz Ooal Gown himself, a former salaryman now inhabiting the skeletal Overlord avatar of his max-level game character; he is cautious, methodical, and perpetually anxious about maintaining the appearance of omniscience. Albedo, the succubus overseer of Nazarick's guardians, serves as his devoted and fiercely jealous prime minister. The vampire Shalltear Bloodfallen, the area guardian of the first three floors, is sent on sensitive missions despite the lingering trauma of a past mind-control incident. Emperor Jircniv provides a human foil, a cunning ruler who becomes increasingly paranoid as his every scheme against the Sorcerer Kingdom fails perfectly. The adventurer Plauton Ainzach and the warrior Gondo represent ordinary inhabitants of the world caught between awe and terror.

The setting expands from the human-centric kingdoms of the earlier story to include the dwarven mountain halls, the imperial capital with its colosseum, and the frontier between nations. Thematically, the manga explores the mechanics of ruling a multi-species state, the weight of absolute power, and the dark comedy of Ainz's subordinates interpreting his casual remarks as profound orders, leading to results far beyond his intentions. The narrative balances political maneuvering, occasional large-scale battles, and vignettes of daily life in the Sorcerer Kingdom as it continues to grow and attract the wary attention of surrounding powers.