A Neo-Zeon remnant group called the 'Sleeves' travels to Side 4's Industrial 7 colony, so that its captain, Zinnerman, can receive a 'key' to something known as 'Laplace's Box' from Vist Foundation leader Cardeas Vist. The item is said to be capable of either restoring the future or destroying the world. Audrey Burne seeks to meet Vist first and convince him not to turn over Laplace's Box, believing the Sleeves will use it to start another war. Along the way, she is rescued by 16-year-old student Banagher Links, who agrees to take her to Vist. Meanwhile, a battle breaks out between the Federation's Londo Bell taskforce and the Sleeves. As the collateral damage rises, the colony is evacuated. Amidst the chaos, Banagher discovers the fatally-wounded Cardeas Vist in the cockpit of the Unicorn Gundam. Before his death, Vist entrusts the Gundam to Banagher, who realizes that Vist is his father. Banagher then launches in the Unicorn and confronts the Sleeves' elite pilot, Marida Cruz, who is piloting the Kshatriya.

The transformed Unicorn Gundam overpowers the Kshatriya and Marida is ordered to retreat. The Unicorn is picked up by the Londo Bell ship Nahel Argama. Banagher is questioned by Daguza Mackle about how he came to possess the Unicorn Gundam but is interrupted by the Sleeves' surprise attack. Full Frontal, the leader of Neo Zeon, demands that the Nahel Argama hand over any items related to Laplace's Box, including the Unicorn. Daguza tries to ensure safe passage by holding Audrey - revealed to be Zeon Princess Mineva Lao Zabi - hostage, but Frontal refuses to accept they have the real Mineva. With no other choice, Banagher sorties in the Unicorn against the Sinanju; he fights well, but is captured when blindsided by the Kshatriya. Banagher is taken to meet Frontal at the Sleeves asteroid base of Palau.

After discussing the nature of Zeon with Marida, who is placed in charge of watching over Banagher, a crew member from the Nahel Argama disguised as a bum bumps into Banagher and passes him a map and a transmitter, telling him to get to the 14th space gate or risk being killed in the coming battle. Banagher laments over how the colony will become a battlefield soon.

The Earth Federation and ECOAS execute their assault on Palau, with the intention of rescuing Banagher and the Unicorn. Saboteurs destroy Palau's connecting bridges, while the Nahel Argama unleashes its Hyper-Mega Particle Cannon, pushing the asteroids towards each other to damage much of the Sleeves' forces. Any Sleeves unit getting out is ambushed by ECOAS units hiding in the rocks. Riddhe springs Audrey from detention so they can go to Earth and talk to his father, Ronan, but not before trying to convince a surprised Micott about their intentions. Banagher finds the Unicorn Gundam and tries to escape, defeating Marida in the process. She is eventually captured and Alberto Vist is allowed to escort her to an Anaheim Electronics facility on Earth.

Banagher and Daguza proceed to the remains of Laplace with the intention of activating Laplace's Box, but hear the original broadcast of the Earth Federation establishment ceremony. The Sleeves are not far behind and the EFSF/ECOAS units fight them. The Sinanju appears and Daguza sacrifices his life to buy Banagher some time to activate the Unicorn's Destroy Mode. The fight sheds parts of the Laplace colony and sends them into the atmosphere. Banagher continues to pursue Full Frontal during the reentry, but a beam magnum shot meant for the Sinanju hits Gilboa Sant instead. As Banagher enters the atmosphere, Audrey arrives at the Marcenas estate.

Note: This episode was co-produced by Studio Ghibli.^{[citation needed]}

The Zeon Remnant forces attack the Federation Capitol Building at Dakar in a feint operation to allow the Garencieres to descend to Earth safely. Banagher is revealed to have been rescued from death by landing on the Garencieres mid-descent. Marida is transported to a Federation facility in North America, where Martha Vist Carbine manipulates her using the wreck of an old Mass-Production Qubeley, which she had piloted in the past. Audrey is held at the Marcenas estate. Riddhe escapes after his father, Ronan, tells him the truth about Laplace's Box. Audrey briefly escapes captivity long enough to have a insightful conversation with an old man in a local diner, which strengthens her resolve. Bright Noa is ordered to take Riddhe on board the Ra Cailum under his command, as well as capture the Garencieres.

After being called in from around the world, the Zeon Remnant forces band together and assault Torrington Base en masse. The Shamblo's pilot, Loni Garvey, falls victim to the malfunctioning on-board psycommu system, becoming a channel for her dead father's bloodlust and begins indiscriminately massacring the population of a local city, despite being ordered to avoid causing collateral damage. Banagher, appalled by the resulting destruction, confronts Zinnerman about his hypocritical rationalizing of the situation and flies out in the Unicorn Gundam to put a stop to Loni's rampage. After failing to reason with her, he activates the NT-D in a last-ditch effort to stop her without resorting to lethal force. Incensed by Banagher's refusal to kill Loni, Riddhe decides to kill her himself, much to Banagher's dismay, and orders him at gunpoint to hand over the Unicorn Gundam according to Captain Bright's orders. As he threatens Banagher, the two witness a mysterious black-colored Unicorn Gundam being dropped into the battlefield.

After neutralizing the Delta Plus, the newly-arrived Banshee captures the Unicorn and returns it to the Ra Cailum, where Riddhe encounters and attempts to question Alberto Vist of Anaheim Electronics' motives, only to be ignored. Meanwhile, on the Garuda, Martha requests Mineva's assistance to coerce Banagher's cooperation in disclosing the location of Laplace's Box. On the Ra Cailum, Bright speaks with Banagher and comes to terms with the latter's actions, before learning of the Federation's covert deployment of the new Dogosse Gier-class battleship General Revil. He sends orders to the Nahel Argama, instructing them to rendezvous with the Garencieres. The Tri-Stars, Riddhe, Marida and Banagher are assigned to provide cover while the Unicorn Gundam is transferred back to the Garuda. However, combat between the Garuda and Garencieres' forces breaks out, and in the ensuing chaos, Banagher restrains the Banshee long enough for Zimmerman to board the Garuda. Riddhe enters the Garuda's rear docking bay and confronts Anaheim staff to rescue Mineva, but before he can do so, Zimmerman begins firing on them. Mineva takes advantage of the distraction to reach Zimmerman, who gives her a parachute. An exploding Anksha damages the docking bay and incapacitates Zimmerman. Riddhe pleads with Mineva to no avail; she leaps off the Garuda and is caught by Banagher, who activates the Unicorn's NT-D system. After he brings Mineva to the Garencieres, Banagher forces the Banshee into the Garuda hangar. Marida identifies the Delta Plus as a Gundam and decimates it with the Banshee's Armed Armor VN claw. Having regained consciousness, Zimmerman reaches out to Marida and implores that she return to the Garencieres. Realizing her original identity, Marida falls out of the Banshee's cockpit unconscious.

The Garencieres undergoes the next phase of its mission and attempts to link with the Nahel Argama as per the original mission. However, an engine malfunction causes the ship to fall out of its designated trajectory. Despite this, the Nahel Argama fires its tow cable, which is caught by the Unicorn; the forces exerted on the machine threaten to pull it apart. The spirits of Daguza Mackle and Gilboa Sant appear, resulting in the Unicorn's psycoframe producing a green luminescence, helping the Garencieres achieve orbit. Both ships find themselves under heavy fire from the General Revil. Flast believes that this was orchestrated by the Federation, but Mineva notes that the Federation attack patterns imply their intent on destroying the Garencieres and the Nahel Argama. Banagher attempts to engage the forces, but the Unicorn has exhausted its fuel supply. Angelo Sauper and his YAMS-132 Rozen Zulu appears and lays waste to the Federation mobile suits. He buys enough time for Full Frontal to head straight for the Revil and open fire with his rocket bazooka.

Full Frontal and Angelo Sauper comes in to rescue the Nahel Argama and the Garencieres as the EFSF flagship General Revil bears down on them. The Londo Bell Tri-Stars chase down the Garencieres, which suddenly blows up as a decoy to buy time for the Sleeves to take over the Nahel Argama. In explaining the takeover, Full Frontal says it was an opportunity to finally open Laplace's Box, reveals his memories of the events of Char's Counterattack and his reasons for continuing to oppose the Earth Federation; implying very strongly that he is in fact Char Aznable. He leaves Angelo in charge of the vessel as it heads back to Industrial 7 - where the last clue leads to - along with the Rewloola.

A group of crewmen send out an SOS prompting the Federation's Luna II base to send a Salamis cruiser in pursuit. Captain Otto defies Angelo's orders to destroy the warship, breaking up the arrangement. An ECOAS team led by Conroy Haagensen assaults the Nahel Argama and gradually fights the Neo-Zeon troops back to the MS hangar deck. Banagher activates the Unicorn to aid in the attack, but Full Frontal faces him and threatens him with death if he doesn't join the Neo-Zeon's cause, since Mineva already knows where the Box is. With Mineva's help, Marida reactivates the Kshatriya to prevent Angelo from destroying the Nahel Argama but declares that they aren't supporting Full Frontal’s plan to use the Box to launch another war with the Federation. As Marida seeks Zinnerman's permission to fight the Sleeves, he decides to finally let her go and live her own life. Angelo and Full Frontal fly back to the Rewloola in Angelo's Rozen Zulu.

Back on Earth, Martha Vist threatens Bright Noa and Londo Bell with being left out of the pursuit operation if they do not co-operate with her. She also barges into a meeting of Ronan Marcenas and several EFSF politicians to announce her intentions to prevent the Box's opening.

Upon entering the region near Industrial 7, Banagher flies out in the Full Armor Unicorn Gundam to get closer to opening the Box. A surprise awaits him though - the Unicorn Banshee Norn, piloted by Riddhe Marcenas, who was earlier briefed by Alberto Vist about the origins of the Vist Foundation.

Banagher and Riddhe continue to fight each other as the Nahel Argama crew and the Sleeves join forces with Conroy's ECOAS troops in taking on the Neo-Zeon forces around Industrial 7. In the ensuing battle, Banagher is able to break away and resupply for the trip to the colony, taking along Mineva while disposing of Angelo along the way. Marida launches in the Kshatriya Repaired to keep Riddhe at bay, however, because of conflicting voices from several people, Riddhe is forced to kill her and later regrets doing it. As a last act, Marida warns everyone of a new threat. Zinnerman aids the Nahel Argama crew in the battle.

Banagher and Mineva arrive at Industrial 7 and head towards Magallanica, where Syam Vist and Gael are. Seeing that the two proved themselves as Newtypes through the Unicorn, Syam explains the truth behind Laplace's Box - it is the original Universal Century charter, which had an extra clause stating that people from the space colonies must be involved in the Earth Federation's future government affairs. However, the Federation erased the clause from the version they've been using since the destruction of Laplace in UC 0001. Syam explains that Mineva and Banagher were worthy of preserving the Box because the Republic of Zeon was going to lose its autonomy in four years' time. As Syam encourages Mineva to broadcast the information about the Box to the Earth Sphere, Full Frontal appears and asks Syam to give it to him. When Vist refuses, Full Frontal leaves in the Neo-Zeon mobile armor and intends to destroy the Box himself. The mobile armor easily disposes of the ECOAS forces in the area, as well as Gael (who barely manages to buy Banagher enough time to get back to the Unicorn). Banagher and Riddhe take on Full Frontal. As Frontal immobilizes Riddhe, he ensnares Banagher and they make a transcendent trip through time, witnessing various events throughout history (including scenes from the earlier Gundam series).

Meanwhile, Bright Noa arrives at Cheyenne Base in North America and, under the guise of an inspection with Londo Bell, comes down to confront Martha Vist Carbine and the Federation leadership over the situation in space. He learns that the Federation is using the Titans' old Gryps II colony laser to destroy Industrial 7 and prevent the opening of Laplace's Box. Ronan Marcenas activates the superweapon over Bright's pleas, but is stunned to hear too late from Alberto Vist that Riddhe is in the line of fire. The Nahel Argama crew is alerted and leaves before the firing, which vaporizes the Neo-Zeon forces. After Full Frontal attempts to sway Banagher's judgement by showing him that the end of time is devoid of life, and that Newtypes cannot hope to change humans' propensity for war, Lalah Sune's spirit appears and tells Full Frontal that the glow of the Newtype phenomena warms the universe. Char Aznable's spirit partly appears and tells Full Frontal that the time has come to pass on, leaving Full Frontal's physical body dead, revealing that he had truly been a vessel for Char's spirit and ideology as he had stated before. As Banagher and Riddhe depart to protect Magellanica, Char, Lalah, and Amuro's spirits soar off into space together with Char saying that the future is up to those left behind.

Banagher and Riddhe combine the power of the Unicorns' NT-D psychofield and stops the colony laser. Seeing Banagher taking the brunt of the laser and the beam starting to exceed his own abilities, the Banshee's Psycho-Frame turns green and the psychofield strengthens. However, the Unicorn begins to break apart. Hearing Marida's voice encourage him, Banagher's spirit separates from his body and crystals of Psycho-Frame expand to cover the Gundam. As the Gryps laser fades, the Federation base on Earth reports that Megallanica is still intact, accompanied by an enormous field of green light projecting from the crystalized Unicorn.

Mineva addresses the Earth Sphere using Megallanica's massive communication field while Syam quietly passes away, having finally realized his redemption. Bright and the Londo Bell take away Martha Vist Carbine for questioning as Alberto asks her to let things go now that the Box was opened. Otto leads the Nahel Argama to protect the Megallanica, now controlled by Zimmerman. The Unicorn, glowing in various bright colors, suddenly flies off into the distance. Riddhe pursues in the Banshee, begging Banagher to return, but Banagher does not respond. Instead, the Unicorn produces a wave of light, which disables the pursuing Federation mobile suits. In Banagher's mind, he encounters the spirit of his father, who nods him in the direction of Mineva. Banagher finally awakens in the Unicorn, as it mysteriously repairs itself. He and Riddhe return to the Megallanica together.

—Tagline