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The former fighting champion and corrupt oligarch Heihachi Mishima is attempting to achieve immortality. To do so, he needs the Devil gene, possessed by both his son Kazuya, whose body is stored in the labs of the G Corporation, and his grandson Jin. However, Heihachi's Tekken Force is defeated by the resurrected Kazuya. Meanwhile, Jin goes into a self-imposed exile. In order to lure Kazuya and Jin out, Heihachi announces the fourth King of the Iron Fist championship, the final prize being the ownership of his corporation.

Tekken 4 contains twenty playable characters, four of whom are new. New strategies in fighting are introduced with the addition of walls, terrain effects, position changes, and enhanced side-stepping. In total there are nine gameplay modes, including a new Training mode and the Tekken Force game.