Iolaus is seduced by the cunning and cruel Xena, Warrior Princess, who aims to use him to destroy Hercules, leaving her free to take over the world.

Xena is betrayed by her lieutenant, Darphus, and forced to walk "the gauntlet". Determined to get her revenge, she forms an alliance with Hercules, who tries to make her see that there is more to life than vengeance and evil.

Darphus, revived by Ares, is pillaging everything in sight to feed a monster called Graegus. Hercules and a redeemed Xena are determined to stop him. Iolaus joins Hercules but has trouble believing she is really reformed.