There are 3 major alignments in Shin Megami Tensei Online, LAW, CHAOS and NEUTRAL, the dividing factor between the two and contains the domains of neither.
Law - Aligned with Heaven and the Messiah, revered by the Messians. Its principals shun the ruthlessly strong and protect the weak. Focuses on law and order, but can lead to oppression of one's freedom. Notable demons are angelics and orderly beings, as well as birds and (ironically) Earth Element. The Law's City of Arcadia is the center of this alignment's activity.
Chaos - aligned with the Earth and freedom. (Earth, in this usage, may refer to the "law of nature" , "the law of the jungle" or "survival to the fittest") Shuns the weak and honors the strong. Revered by the Gaians. Gives its followers the courage to take power and wealth for themselves. Total freedom can lead to discord and anarchy. Notable demons are foul beings and oni, as well as powerful figures such as many non-Abrahamic gods and historic conquerors. The Chaos's Souhonzan is the center of this alignment's activity.
Neutral - Total individualism. Serves neither side or respects both moderately. A "do what you think is best" morality. Notable demons are animals, incubi, succubi, mischievous creatures and guardian figures. The city of Protopia is most associated with Neutral, as well as the Commune if its alignment is not considered static.
In your quest to become a Demon Buster, you will eventually be given choices which decide what path you currently walk along. The system itself is not a stone wall, each decision affects your overall alignment by only so much, so those finding themselves headed where they do not wish to be go have a chance to turn things around for themselves.
Aside from being semi dynamic, it also greatly affects your disposition when befriending new demons and summoning current ones. The base summoning cost in magnetite is determined greatly by your alignment and the demons you are trying to summon. A very LAW-tended person can summon powerful angels while spending very little magnetite as possible, but that same person attempting to summon a CHAOS demon, will have to pay a high toll. Don't fret NEUTRAL players, there's NEUTRAL demons as well! Of course, either side of the alignment shift will still cost a hefty sum.
Also, your alignment will activate some effects on Soul Stones or Equipments. The effect may be good or bad. Like for example if the Beiji Weng Soul Stone is Soul Stoned on a weapon, if your alignment is Law, you will have a +30% Cool-down. If you are in Chaos alignment using the Soul Stoned Weapon, you will have +30% Incantation time. An example for Equipment is the All Supremacy Outfit Set. The blue set (The Fighting Dragon Set) have effects which will only be activated if your alignment is Law.
Your alignment is decided by the choices which you make during your Acts. You can also donate to the two churches to change your alignment towards LAW or CHAOS. Donating to the Messians will move you towards LAW and donating to the Gaians will move you towards CHAOS.
NPC to donate Messians (for LAW shift): "Devout Messian" in Arcadia.
NPC to donate Gaians (for CHAOS shift): "Pleading Gaian Priest" in Souhonzan.
Note: You may donate as much as you want, however, only one donation per 20 hours for a max of 50,000 may be spent for a shift in alignment. Also keep in mind the blessing will not give you a shift in alignment.
Special Alignment Quests
- In Northern area of Ueno , there is a repeatable quest from a Guard at X-20 Y-15 called "Wake Up Call" which asks you to do a errand over to Arcadia Pharmacy. When you reach the pharmacy, the girl tells you to go find the Insomniac Templar, which is located in north-west X-19 Y-17 of Shinagawa. She is the same one who offers the "Lights Out" quest mentioned below. After talking to her, return to the pharmacist who will give you a free sample. Finally, return to the Oversleeper Gaian. Tell him: "It's Free" for a tiny shift towards LAW, or "100 macca" for a tiny shift towards CHAOS.
- The quest "Lights Out" offers a similar function. You can find the Light's Out quest in north-west X-19 Y-17 Shinagawa from the Insomniac Templar. Go to the Souhonzan Pharmacy, then the Oversleeper Gaian, back to the pharmacy, then back to the Insomniac Templar. She asks you the same question as the other guard. Tell her: "It's Free" for a tiny shift towards LAW, or "100 macca" for a tiny shift towards CHAOS.
You can repeat both "Lights Out" and "Wake Up Call" but there is a unknown daily or weekly limit. It is being checked if you need to accept the quest when it seems "appropriate". Like the Wake up Call quest may only be able to get during the daytime. And the Light's Out quest may be only available at night. - *Require testing to be proven*
- note I've done both these quests, starting "Wake up Call" at exactly 6:00, and before 6:00 it was unavailable, and finished it around 18:00. Then, started the "Lights Out" quest at 2:00 right after. finished 17:00 or so. i went back to "lights out, and was able to restart it, this was around 22:00, because i was headed back to Uneo, thinking to wait for the wake up, but noticed the time. not only did i restart it in less than one day's time, but also was able to take "lights out" back to back. i did leave the map, and a few minutes had passed, however. But finishing the "lights out" quest a second time that day didn't give me an alignment shift. Also, picking LAW answers, mine went from(in neutral) Night to Wilder after first, then from Wilder to Fairy from second.
- The quest "The Oppressed" from a messian in an alley in western Arcadia also offers you some chances at shifting your alignment during the small quest it offers. It is unknown if it is repeatable. The first thing he asks you is to see DB Tanaka for 2,000 macca he owes him. DB Tanaka is the guy from act 5 in north-eastern Nakano near the Babel exit, who had the data. The alignment shift is very obvious here. Threaten him and demand the most money you can for a CHAOS shift. Or be the nice guy for a LAW shift. Once you return to the priest in Arcadia, he will ask you to find a bum who owes him money. This is the same guy as in the "Believe" quest. He's in Babel on the upper platform in the north-west. You can pay his debt off for him or you can demand he pays you. Just like the Tanaka quest, pick the appropriate answers for a shift.