On January 23, U.C. 0079, a decisive battle between Zeon and the Earth Federation begins at Side 5, or Loum. Though the Zeon forces are overwhelmingly outnumbered, their secret plan suddenly turns the tide of battle as they deploy a special assault regiment made up of humanoid mobile suit weapons, winning them a huge victory. Char Aznable of the Zeon forces produces particularly impressive results in his red mobile suit “Zaku II”, earning a promotion to Lieutenant Commander and the nickname "Red Comet."

After the Battle of Loum, the Earth Federation Forces initiate Operation V to fight back against Zeon. At Side 7, young Amuro Ray is indirectly involved as he takes action to uncover the secret of the new weapon "Gundam." Meanwhile, as high officials of the Earth Federation and Zeon forces meet in Antarctica for early peace negotiations, a certain speech is broadcast from Luna II throughout the world...