U.C. 0097, one year after the opening of "Laplace's Box." Despite the revelation of the Universal Century Charter that acknowledges the existence and rights of Newtypes, the framework of the world has not been greatly altered. The conflict later dubbed the "Laplace Incident" is thought to have ended with the downfall of the Neo Zeon remnants known as the Sleeves. In its final battle, two full psycho-frame mobile suits displayed power beyond human understanding. The white unicorn and the black lion were sealed away to remove this danger from people's consciousness, and they should now be completely forgotten. However, the RX-0 Unicorn Gundam 03, which disappeared two years earlier, is now about to show itself in the Earth Sphere once more. A golden phoenix... named Phenex.

Yumi Ikoma and Ryou Masaoka are children who have been selected to take part in a top secret mission, to be the pilots of the first Fafner combat units; the last chance of survival for the human race. The enemy is ruthless, remorseless and is able to read the minds of humans. Therefore, the details of this mission are kept a secret even from the personnel involved. The young pilots must use all their courage and faith in order to survive and complete their mission or the fate of mankind would be compromised.

Set in a future where the solar system is dominated by trade federations who are in constant conflict. In order to escape his restrictive homeland of Japan, and under the recommendation of his military cook friend Pupkin, Akira enlists in a trade federation orbital drop infantry unit. Such infantry are notorious for their 70% casualty rate, and are nicknamed "Yakitori" for their expendability.

In Universal Century 0079, forces of the Earth Federation and Principality of Zeon engage in a battle within the Thunderbolt Sector during the One Year War. This section of space—known for its constant strikes of electricity—proves to be a deadly battlefield, as Federation pilot Io Fleming leads a charge against Zeon's ace Daryl Lorenz and his squad of snipers. With the fighters on both sides proving to be formidable soldiers, neither side is willing to back down, fighting strategically amongst the remnants of colonies. But when Io gets a hold of a prototype Gundam, Daryl will have to make a sacrifice in order to obtain enough power to crush his enemy and ensure that Zeon is victorious, or watch as his comrades are slaughtered by a single man.