Shantae and her friends go to a tropical island resort where they encounter other Half-Genie allies. At the beginning of the game, Shantae is invited along with the other Half-genies to participate in the Half-Genie Festival. During the performance, however, the Seven Sirens cut the lights and use the cover of darkness to kidnap the other Half-Genies, leaving Shantae alone onstage once the lights come back, much to the confusion of the audience. The next day Shantae begins to feel suspicious, so she decides to venture into the islands underground terrain to uncover its secrets and come face-to-face with the Seven Sirens, freeing the other Half-Genies along the way, despite her allies (specifically Mimic and Sky, though her dialogue implies that Bolo doesn't want her to disappear either) forbidding her to go in an attempt to protect her. This is a good show of Shantae's determination - unlike others, Shantae is not willing to sit around and wait for problems to be solved. She is determined to help those in need, even if it means putting herself in harm's way.

It is mentioned several times that she doesn't know who her parents are, only that her mother was a genie. Although she's willing to explore her genie side, hoping that it will bring her closer to her mother, she turns down the genies' offer to stay in the Genie Realm at the end of the first game, and at the end of Risky's Revenge is shown expressing sadness as being even farther from her half-genie nature (and subsequently her mother) after having lost her magic powers. It is strongly implied in the events of the game that the mysterious Warrior she meets inside the Village of Lost Souls is none other than the spirit of her father, who went into the land of the dead to search for his daughter but never returned. Neither Shantae nor the Warrior himself seem to realize the possible connection.