Heir to the Empire is ultimately a story of good versus evil in the galaxy. The story portrays the New Republic still in its infancy, five years after the defeat of the evil Empire at the Battle of Endor. With the heroes of the Rebellion heading up the new government, the new government still battles remnants of Empire. A grand admiral emerges from the recesses of the galaxy to stir up trouble and is bent on the utter destruction of the Rebellion.

It is five years after the defeat of the Empire at the Battle of Endor and while the New Republic has pushed the Empire back from its previous glory days, there are still evil forces to content with. Grand Admiral Thrawn emerges as a threat to the peace the New Republic is struggling to make with many of the star systems within the galaxy. He launches an attack in the Obra-skai system, alerting the New Republic to trouble. In his quest to take down the Rebellion, he finds a long-forgotten Dark Jedi Master, Joruus C'boath on a far away planet. As a bribe to convince C'boath to work with the Empire, Thrawn promises to hand over Luke Skywalker and his sister Leia Organa Solo.

Han Solo, on a contact mission representing the New Republic, seeks out smugglers to aid them with cargo ships that the New Republic sorely needs. In the meantime, Leia Organa Solo, Han Solo's wife, is busy with the diplomatic mission of building a new government for the New Republic. Expecting twins, she is run ragged with the tasks set before her. Gathering together for a diplomatic mission to the planet Bimmsaari, Leia, Han, the wookie Chewbacca and Luke Skywalker leave the New Republic's capital of Coruscant. They quickly discover that someone is pursuing Leia. In order to hide her, Chewbacca agrees to bring her to Kashyyyk, the wookie planet.

On the Empire's side, Grand Admiral Thrawn and Captain Pallaeon travel to Wayland to rummage through the late emperor's storehouse. While there, they encounter the Dark Jedi Joruus C'baoth. They convince him to go along with them to help their cause. In return, they promise to deliver Luke and Leia to him to do with as he wishes.

While leaving a mission from Dagobah, Luke is pursued by Grand Admiral Thrawn and narrowly escapes. A smuggler, Mara Jade, senses his presence and picks him up. Her boss Talon Karrde insists on holding him as a prisoner but refuses to hand him over to the Empire. Some days later, Han and Lando Calrissian travel to Mrykr to visit Karrde to discuss the New Republic's quest to recruit smugglers for their cargo ships. While there, Grand Admiral Thrawn snoops around Karrde's territory and sparks a series of events that wins Karrde to the side of the New Republic.

Luke is able to escape his prison with the unexpected help of Mara Jade, who is determined to kill him. After Luke and Mara escape the forests of Myrkr, Luke catches up with Han and Lando. Before heading home to Coruscant, they make a stop at the Sluis Van Shipyards, which they discover are under attack. They arrive in the throes of battle and succeed in thwarting Thrawn's mission of stealing the New Republic's ships. On their way home, Leia alerts them to domestic trouble between two Council members.