After vanquishing Alexei, Ryu Hayabusa then travels to Europe to take another crack at yet another Greater Fiend, Volf. The Aqua Capital is a mixture of what appears to be Rome and Venice with both the Colosseum and the beautiful canals providing for areas of bloodshed. Initially a peaceful place, Volf becomes bored rather quickly and sends his werewolf henchmen to bring back a worthy adversary. As they terrorize the people of the Aqua Capital, Ryu steps in and begins his own onslaught.
It is here in the Aqua Capital that Ryu fights his way to the Lycanthrope's Castle after a series of battles in the underground sewer system and defeating the Water Dragon.