The story is set seventeen years after the events of Far Cry 5. After the nuclear exchange known as "the Collapse" devastated the world, survivors attempt to rebuild the community in Hope County. Their efforts focus on Prosperity, a township built on the remains of John Seed's ranch. The survivors are threatened by the Highwaymen, a roving band of organized bandits. The Highwaymen are organised into chapters, with the local chapter led by twin sisters Mickey and Lou. The Highwaymen terrorize the landscape, forcing survivors into submission and stripping communities of resources before moving on. The remnants of the Project at Eden's Gate—the antagonists of Far Cry 5—have established their own community called New Eden. They have given up most forms of modern technology and isolated themselves in the north of Hope County. Despite embracing Joseph Seed's teachings, New Eden is wracked by internal division that arose after Joseph's disappearance. The game also features the return of the Deputy, now one of Joseph's acolytes known as the Judge; and Joseph Seed; the protagonist and main antagonist of Far Cry 5 respectively. The player takes on the role of a new character dubbed the "Captain", who is part of a group that travels the country assisting other survivor groups in need.
Far Cry New Dawn uses a smaller version of the Hope County map featured in Far Cry 5. Large sections of northern and eastern Hope County are inaccessible after being irradiated. Some parts of the north can be accessed over the course of the story campaign. Many of the individual locations from Far Cry 5 have been redesigned, either having been reclaimed by nature or repurposed by the Highwaymen. Some of these locations have new areas for the player to explore, such as cave systems, bunkers or buildings.