- For more details on faction in the original game, see Rome: Total War/Factions.
There are only eight factions in Alexander. Of these, only one, Macedon, is playable in campaign mode. The player can make playable the other factions only by changing the expansion's files. The factions are:
- Scythia: The Scythians control Scythia but in Alexander they also control Chersonesos.Their army consists of master horsemen and archers but almost no melee infantry. The Scythians are not a threat to the Macedonians but they can be conquered with difficulty. Also, thick forests block all the land next to the capital of the Scythians, making it troublesome for a player to conquer it.
- Dahae: Representing neighbouring, barbarian peoples like the Illyrians, Thracians, Sarmatians and Scythians, and consisting of independent cities like Byzantium. They are similar to the barbarian factions in the original game; their armies consist of large groups of poorly equipped warriors, including warriors wielding war scythe-like swords. They control various territories on the northern edges of the map.
- Illyria: The Illyrians control the western half of the Balkans with the capital at Epidamnus. Their army consists of axemen and specialist infantry with a limited collection of cavalry. Like their neighbours the Thracians they are a barbarian nation and they are also among the most dangerous nations at the beginning of Alexander.
- Thrace: Thrace begins with only Thrace under control with the capital of Byzantium. The army consists of barbarian close infantry including falxmen but very little cavalry. The Thracians are a barbarian race and not a Greek one as seen in Rome Total War. Along with the Illyrians they are among the most dangerous nations at the begin of the campaign. They are allied with the other nations that are rival to the Macedonians.
- Macedon: Macedon begins with most of Greece under its control. The army is similar to that of Macedon in the original game, consisting of various hoplites and phalanxes, and powerful cavalry, including the Companions; the army lacks archer units, although it can field javelin-throwing units. Macedon also has a unique unit representing Alexander's personal unit of elite Companion cavalry led by the king himself. Unlike Rome and Barbarian Invasion, if the player's king is killed, the campaign ends in defeat.
- Persia: The Persian army of Darius III is made up of a variety of troops, from poorly equipped masses of infantry and archers, to quality cavalry and elite units like the Immortals (also known as "Apple-bearers", from the apple-shaped ornaments on their spears), as well as mercenaries from Greece and Phrygia. The army also has access to chariots, which the Persian generals also ride. The Persian Empire of the Achaemenid dynasty is vast, controlling all of Anatolia, Egypt, modern day Iraq and Iran, and even as far east as western India- and everything in between.
- India: Far from being a unified nation-state, the Indian kingdoms were nonetheless capable of sending awe-inspiring armies into the battlefield. Their armies consist of large units of lightly armored troops, chariots and painted war elephants. The Indians do not appear in the single-player campaign.
- Rebels: The Rebels are not a conventional faction. Throughout the Total War series, the 'rebels' have been used to represent rebellious provinces and various minor factions (such as the Illyrians in the original Rome: Total War). Unlike in most Total War titles however, in Alexander there is not a single 'rebel' province at the beginning of the game, and the 'rebels' will only appear later in the game, either randomly as 'brigand' armies, or when a province revolts, either as a natural, historically authentic progression of the campaign after the player conquers Persia, or when a province's 'public order' rating drops below a certain level... As in other Total War titles, The 'Rebels' faction, being an essential gameplay mechanic, cannot be destroyed, even if every 'rebel' army on the map is destroyed and every 'rebel' settlement captured, the 'Rebels' faction can never be truly destroyed and will almost certainly reappear later in some form.