The novella pits Senator Garm Bel Iblis, who is believed to have died along with his family at the hands of an Imperial assassin, and CorSec inspector Hal Horn against one of the Empire's most dangerous agents—namely, Ysanne Isard. Moranda Savich, hiding from Inspector Horn, acquires a pack of datacards that include sensitive Imperial information. Isard, with her cohorts, seeks to retrieve the datacards at the behest of Armand Isard.
According to the The Essential Reader's Companion, the events of Interlude at Darkknell take place in about 0 BBY. However, this contradicts events described in Star Wars: The Force Unleashed, in which Garm Bel Iblis is taken to the Death Star by Darth Vader. Interlude at Darkknell, which describes Bel Iblis as being only vaguely aware of "Tarkin's project", consequently cannot have taken place later than 2 BBY.