The story begins six month after the war against the Divine Crusaders (DC) in Super Robot Wars II. The war left the world in a great state of disorder and chaos, and the United Nations was powerless. To solve the crisis, the Earth Federation was established, replacing the United Nations. Members of the White Base were reunited and tasked with maintaining peace, but only old equiptments were supplied to them due to the lack of power available.
While Earth seemed peaceful for a while, cases of sudden disappearances of federal troops began to occur frequently, and Londo Bell was ordered to investigate. Originally it was believed that DC remnants were responsible, but it is later discovered that the true reason behind the disappearances was a threat from outer space, an alien invasion like Bian Zoldark feared that could occur.
A new war begins, with Londo Bell troops fighting against DC (now led by the Zabi family) and the alien forces.