Nergal was not always evil. Prior to the events of the game, he met Athos in Nabata and they quickly became friends. They were equal in knowledge and power, and together discovered the desert village of Arcadia, a place where dragons and humans coexisted. Athos and Nergal were both surprised that such a place could exist, and upon invitation from the village leader they stayed there for hundreds of years learning from the dragons' vast libraries. They constructed an oasis for the villagers and hid the city behind a veil of sandstorms. Nergal and Athos eventually drifted apart in their beliefs. Nergal discovered a magic which could take the life force, or quintessence of other living creatures and turn it into power. He began experimenting with small creatures, and as he grew more confident he used this same technique on ever more complex animals, eventually taking the life of a human. Athos and the village elders discovered Nergal's secret deeds and urged him to stop, but Nergal would not listen. Athos and the Divine Dragons managed to strike him down, and Nergal was banished from Arcadia. He vanished and slowly built up his power again to avoid the eye of Athos.
If the player clears several side-quest chapters of Hector's campaign, it is revealed that Nergal was in fact the father of Ninian and Nils because of a relationship with a dragon, and sent them through Dragon's Gate to protect them when his wife was kidnapped. Afterward, he turned to dark magic to make himself stronger so he could open the Gate himself and reclaim his children. Nergal lost himself in the darkness and forgot why he ever wanted to open the gate in the first place, only remembering that he needed power and that the Gate must be opened.
Nergal was the one who called Ninian and Nils through Dragon's Gate a few hundred years after he was banished from Arcadia. He does this so that he may use them to call more dragons into this world, and then harness their quintessence so that he may become the most powerful being in the world.
He is responsible for the golden-eyed morphs (i.e. Sonia, Limstella, Ephidel) that travel the world looking for the quintessence of powerful individuals to give him even greater strength so that he may call dragons through Dragon's Gate where he keeps hold of Ninian, Nils, and Eliwood's father Lord Elbert at the beginning of the story. He stirs up war in Lycia by using an assassins group called the Black Fang, which he controls through his morph Sonia.
In the last chapter of the game, Nergal uncovers his face from the turban that hides it to reveal a wound along his forehead and a burned right eye. He exclaims that the person he had thought to be his truest friend, Athos, had inflicted the wound upon him. In his final moments, Nergal draws three dragons from Dragon's Gate in a final desperate attempt to destroy his foes.