In the prologue (set during the Battle of A Baoa Qu in December U.C.0079), Zeon ace pilot Anavel Gato returns from combat to find Admiral Aiguille Delaz telling him of the deaths of Gihren Zabi and Kycilia Zabi, as the Zeon forces surrender. Despite the shock defeat, both men retreat and plan the return of Zeon. In October U.C.0083, the Federation space carrier Albion delivers two Gundam Development Project (GDP) prototypes, the RX-78 GP01 Zephyranthes and the GP02A Physalis, to the Torrington Base in Australia for ground testing under the aegis of Anaheim Electronics engineer Nina Purpleton. Because of lax security, a Zeon mole helps Gato infiltrate the base and hijack the GP02 just after its nuclear weapon is loaded in the middle of the night. Having witnessed Gato activate the mobile suit, Ensign Kou Uraki takes over the Zephyranthes and prepares to face him just as Zeon forces assault the base.

Back at Torrington, Federation General John Kowen assigns Burning to lead the Albion's pursuit of Gato with a new crew of pilots to help him. Kou and Keith join the mission. Lt. Bernard Monsha, one of the new additions, doubts Kou's capability to fly the GP01. Despite Nina's assurance that Kou handled the mobile suit well, Monsha challenges him to a first-shot mobile suit duel to see who better deserves to pilot the Zephyranthes. Although Kou wins the match, Burning intervenes and sends both pilots to one week in the brig. Meanwhile, Gato heads for the Kinbareid diamond mine in East Africa, which is still occupied by Zeon holdouts from the One Year War.

Gato flies back to the Garden of Thorns, a secret Zeon colony base in the Shoal Zone, to present the GP02 to Delaz. However, a chance encounter with Zeon commander Cima Garahau rankles him when their ships almost collide. Upon delivering the GP02, Delaz makes an Earth Sphere-wide declaration of war, explaining that the GP02 and its nuclear weapon is proof of the Earth Federation's military buildup. Meanwhile, aboard the Albion, Nina tries to get closer to a dense Kou when the alert sounds. Kou and the rest of the Albion's mobile suit pilots engage the Zeon intruders. However, Nina's warning about the GP-01's poor mobility in space without the so-called Full Vernian (Full Burnern) backpack proves true as Kou crashlands in the Albion under heavy damage.

Cima's blackmailing apparently works, as Anaheim asks Nina to be reassigned away from the Albion and out of the mobile suit development team altogether. Keith, who dates Mora, offers Kou movie tickets so he can ask Nina out after a field test. He does make a move, but a remark about the tests angers Nina again. Meanwhile, Kelley gets paid in gold bullion for his work on the Val Walo, but is shocked to hear that the Zeon forces do not want him piloting it for the new campaign. Incensed, Kelley takes out the mobile armor and challenges Kou to fight him so he could prove himself worthy of joining the Delaz Fleet again. When Nina gets in the way, Kou finally admits his feelings for her and defeats Kelley, who does not bail out from the exploding Val Walo because he never installed an escape system.

Kou and Gato, now in their mobile armors, finally take each other on as the Albion crew tries to stop the colony before it passes the minimum limit for terminal entry. Cima's crew takes Delaz hostage aboard his flagship, the Gwaden. At Jaburo, General Kowen desperately tries to convince EFSF supreme commander Gen Gene Collini of mobilizing the military's full might to stop the colony, but Jamitov Hymen has Kowen taken away. Delaz discovers that the Federation has deployed the Solar System II mirror array past the terminal entry point and encourages Gato to see the operation through - before Cima kills him. Out of rage, Gato drives one of the Neue Ziel's claws at the Gwaden bridge.

The battle to stop the colony goes full-blast, with the Federation and Cima's forces working together to protect the Solar System II on one hand and the Delaz fleet shepherding the colony on the other while the Axis Advance Fleet stands back. Kou kills Cima in the fracas. The Solar System II fires, but Gato destroys the command ship, resulting in a weaker blast that barely damages the colony. As it breaks through the solar array, Gato enters the colony and inputs the final course corrections. Kou tries to stop him, but Nina interferes and protects Gato as they leave, revealing that they were once lovers. The two pilots continue to fight after Gato has Karius bring Nina to safety. The Solar System II remnants fire again, with many forces on both sides destroyed as the colony crashes into the Midwest. The Federation orders the Axis Advance Fleet to leave the Earth Sphere immediately, having overstayed their welcome, but Gato leads the Delaz Fleet survivors to attempt a breakthrough and dies in a kamikaze attack on a Federation ship. Several weeks later, Hymen and Bask Om announce the creation of the Titans. All records of Operation Stardust and the GP are erased, including Kou's one-year hard labor sentence. He eventually reunites with Nina, Keith, and Mora.