The world of Monster Rancher was once a highly advanced technology-oriented civilization. The people of this society were especially skilled at genetic engineering. Using gene manipulation, they were able to develop special designer pets and store their genetic information on stone tablets known as "disks", similar to CDs. Using these disks, the artificial animals could be regenerated at special shrines.

However, war broke out between the countries of the civilization. The pets were modified into biological weapons, and the war of the monsters began. The great civilizations completely annihilated each other, leaving nothing but relics behind, and much of the world's technology was lost. The monsters were sealed into their mystery disks and hidden away.

Centuries later, as humanity was just beginning to rediscover basic technology, people found the artifacts owned by the so-called "Ancients" and attributed divine properties to them. They also discovered the lost disks and shrines. Using these, monsters were again born. Only through the power of the phoenix could the lost discs be revived back into living monsters.

Thus started a popular new sport, Monster Breeding. Breeders or trainers raised monsters for battle to compete in nation-wide tournaments to see who could raise the strongest beast.