The movie is set 30 years after the events of Mobile Suit Gundam: Char’s Counterattack and none of the characters that had previously appeared in the series were present in the film.
In the year U.C. 0123, the military arm of Cosmo Babylonia, the Crossbone Vanguard, attacks the Earth Federation colony Frontier IV. Student mechanic Seabook Arno and his friend Cecily Fairchild are caught in the middle of the fighting as the Federation garrison is quickly overwhelmed. Seabook and Cecily lead a group of refugees into the lower levels of the colony, where they meet up with Seabook’s father, Leslie. As the group boards a lifeboat, Seabook catches sight of Cecily’s father, Theo, attempting to abduct her and tries to intervene. However, the Crossbone Vanguard arrives and takes Cecily, who is actually Berah Ronah, part of the Ronah family who are the leaders behind Cosmo Babylonia. Seabook is forced to retreat to the lifeboat while Leslie stays behind to help a lost child.
Cecily is taken to meet her real father Carozzo and grandfather Meitzer, who both dream of overthrowing the corrupt Earth Federation and replacing it with a more just aristocracy. Cecily is reluctant to join them, but feels she has no choice. Meanwhile, the lifeboat manages to reach the neighboring colony Frontier I, but it is also under attack by the Crossbone Vanguard. Seabook’s group then comes across the Space Ark, a Federation training ship carrying the inoperative Gundam F91. Due to the confusion caused by the Crossbone Vanguard’s surprise attack, the Space Ark is run by a barely experienced skeleton crew with no available pilots. Pressed into Federation service, Seabook works on repairing the F91 and discovers it was developed by his mother, Monica. The crew is able to repair the F91 just in time to repel an assault by the Crossbone Vanguard, forcing them to retreat.
Seabook then uses the F91 to return to Frontier IV, where Cosmo Babylonia has already repaired most of the damage to the colony and has fully occupied it. He infiltrates the Ronah estate and makes contact with Cecily. However, he is forced to flee without her when the guards pursue him. Leslie helps Seabook escape Frontier IV, but he suffers a mortal head injury in the process and dies on the return trip to Frontier I. Cecily joins the Crossbone Vanguard under Zabine Chareux’s command. He helps train Cecily to be a mobile suit pilot and warns her that there are several factions within Cosmo Babylonia working against each others’ interests, with one faction working on a secret superweapon codenamed “Bug”. Seabook returns to Frontier I, where he is again forced by the Federation to help defend the colony against an impending attack by the Crossbone Vanguard. Instead, Seabook and the crew of the Space Ark secretly decide to desert and flee to the Moon.
Cecily is assigned the advanced Vigna Ghina mobile suit and accompanies the Crossbone Vanguard as they break into Frontier I. After a brief but intense skirmish, the Crossbone Vanguard are once again forced to withdraw. Seabook encounters Cecily in battle and she decides to defect upon discovering her friends are still alive. Carozzo then arrives at Frontier I and deploys the Bugs, automated war machines designed to specifically hunt down humans. He believes that Earth’s population must be purged to preserve its environment, and intends to use Frontier I as a testing ground for the Bugs. Seabook and Cecily work together to destroy the Bugs, with Cecily destroying their mothership. Angered, Carozzo deploys in his own mobile armor, the Rafflesia, and battles Seabook and Cecily. The Vigna Ghina is destroyed, ejecting Cecily into space and Seabook destroys the Rafflesia in response. Zabine arrives on the scene, but decides to spare Seabook and the Space Ark due to his disagreement over Carozzo’s use of the Bugs and Rafflesia. After a desperate search, Seabook is able to find and rescue Cecily as the Space Ark arrives to pick them up.