Seven returning characters from previous Sonic games star in Sonic Lost World. The protagonist, Sonic the Hedgehog, must defeat the main antagonist Doctor Eggman and stop the Deadly Six. Aiding him in his quest is his best friend Tails, a fox who has the ability to fly. Knuckles the Echidna, Sonic's strong friend, and Amy Rose, his self-proclaimed girlfriend, also make relatively minor appearances.
The main antagonist of the series, Doctor Eggman, is a mad scientist who seemingly turns over a new leaf to help Sonic stop the Deadly Six. Eggman's henchmen Orbot and Cubot make a return appearance. Also serving as the main antagonists and boss characters are the Deadly Six, a group of the world's indigenous Zeti race consisting of Zazz, a hyperactive Zeti; Zomom, an obese and dim-witted Zeti; Master Zik, the elderly founder of the tribe and Zavok's teacher; Zeena, a flirtatious and self-absorbed Zeti; Zor, a diminutive and pessimistic Zeti; and Zavok, the tribe's leader. The tribe plans to steal the life energy from Sonic's world to increase their own power.
Sonic and Tails pursue Doctor Eggman, who has captured several of their animal friends with the intention of using them to power his robot army. While the two attempt to retrieve a falling capsule filled with animals, Eggman shoots down Tails' plane. However, they end up discovering a world in the sky known as the Lost Hex, and crash land there. As they explore the world, the duo discover that Eggman has enlisted the aid of a group of the world's indigenous Zeti race, collectively known as the Deadly Six, using a magical conch to keep them under his command. However, when Sonic rushes in and kicks the conch away, the Deadly Six betray Eggman and take control of his Badnik army. They then start to use one of Eggman's machines to siphon energy from Sonic's world below, planning to drain all of its life force until there is nothing left and use it to power themselves up. Reluctantly, Sonic agrees to work with Eggman, believing that he needs his help to stop the machine, though this seems to cause some distrust between him and Tails.
As Sonic battles his way throughout the Lost Hex, the Deadly Six concoct a plan to capture Sonic and turn him into a robot under their control, but they end up accidentally capturing Tails instead. After Eggman is seemingly killed falling into lava, Sonic comes across the Deadly Six as they prepare to use the roboticized Tails against him. However, prior to the conversion, Tails managed to reprogram the process to retain his free will and instead helps Sonic to defeat them. Upon reaching the machine and finding it already switched off, Eggman reappears, having faked his death and used the energy harvested to power his latest giant mech. Sonic defeats Eggman, sending him falling to the planet's surface, and he and Tails restore the stolen energy to the world below before returning home.
In a post-credits scene, Orbot and Cubot find Eggman, who has survived his fall, and they dig him out of a soft spot of dirt he landed on. Upon realizing that half of his mustache is missing, Eggman throws another tantrum, prompting Orbot and Cubot to run away in fear.