Plot
In London, Espella Cantabella seeks the aid of Professor Layton and his apprentice Luke. The three are attacked by what appear to be witches; Espella escapes on a cargo freighter while Layton and Luke are seemingly drawn into a medieval town called Labyrinthia via a book owned by Espella. Espella is quickly arrested for assault and theft when the freighter docks, following an attack on a freighter staff member. Phoenix Wright, an American defense attorney in London as part of a legal exchange, is assigned to Espella's case. Phoenix ultimately deduces that Espella stumbled upon a jewel smuggling operation and was attacked by the supposed victim. Afterwards, he and his assistant Maya Fey are drawn into Labyrinthia through Espella's book as well.
Layton and Luke learn that Labyrinthia is controlled by the Storyteller, a man who allegedly can turn anything he writes into reality. The town's Knights of the Inquisition, led by High Inquisitor Darklaw, prosecute and execute by fire all supposed witches in the Witch's Court. The Inquisition seeks to locate the Great Witch Bezella, the witches' mythical leader who caused Labyrinthia's devastating Legendary Fire millennia ago. Layton and Luke discover Phoenix and Maya, having been brainwashed into thinking they are bakers. When Espella is accused of witchcraft, she calls on Phoenix to defend her; overcoming his brainwashing, Phoenix and the others prove Espella's innocence.
As the four continue to investigate, Layton is attacked by a witch and turned into a gold statue. Maya is accused of the attack and the murder of alchemist Newton Belduke, but Phoenix proves that Belduke committed suicide and Maya did not attack Layton. He also learns that Espella is the Storyteller's daughter. Belduke's butler is exposed as a witch; Espella confesses to being Bezella to protect her. Maya rescues Espella, only to be apparently executed in her place, while Phoenix, Luke, and Espella escape.
Layton and Maya awaken outside town, finding a settlement populated by Shades, hooded worshipers of the Great Witch. The two discover underground ruins, where they regroup with the others. The five discover the remnants of an ancient civilization that sealed a Bell of Ruin after it caused a disaster. Espella suddenly experiences visions of the Legendary Fire and flees. When the group returns to town, Bezella appears and seemingly kills the Storyteller with a colossal fire dragon. Espella is arrested and charged, with Darklaw personally prosecuting the case. Layton and Luke investigate the Storyteller's Tower, finding him alive and well at the summit. Layton realizes that the Storyteller's story is being sabotaged by outside forces. Meanwhile, Phoenix deduces that Darklaw intended to frame Espella. Layton returns and assumes the role of prosecutor so Darklaw can testify.
The Storyteller later takes the stand, revealing his real name is Arthur Cantabella. He explains that Labyrinthia is a research facility that tests the effects of a mind-controlling substance found in the groundwater, which causes anyone who drinks it to lose consciousness at the sound of silver being struck, and the townspeople are test subjects who volunteered to have their memories wiped so they could start new lives. The Legendary Fire occurred when the Bell of Ruin caused the townspeople to simultaneously fall unconscious as a result of these chemicals and the town's fires got out of control. Believing herself responsible, Espella became obsessed with the idea that she was possessed by Bezella, and Arthur created Labyrinthia's witches and mythology to counteract Espella's condition. He had the Shades create the illusions of magic and indoctrinate anyone "killed" as a result of witchcraft or the Witch Trials into their number. Belduke was Arthur's partner, but killed himself due to accumulated guilt over the deception. Darklaw is revealed to be Belduke's daughter and Espella's childhood friend Eve, who blamed Arthur for her father's suicide; she lured Layton into Labyrinthia and sabotaged the story to get revenge, and was forced to include Phoenix when he unwittingly got involved. Phoenix and Layton deduce that Eve was the one who rang the bell, but was traumatised and repressed the memory. Eve reconciles with the Cantabellas, and Arthur lifts the hypnosis. The townspeople decide to stay in Labyrinthia, and Phoenix, Layton, Maya, and Luke return to the English mainland.