A brief prologue explains that it is the year Universal Century 0079. Mankind has moved much of its population into gigantic space colonies. Nine months ago, the group of colonies furthest from the Earth, Side 3, declared itself the Principality of Zeon and declared war on the Earth Federation. Initial fighting lasted a month with both sides losing half their respective populations. Eight months have passed since the rebellion began and both sides are at a stalemate.
Three Zeon pilots, Slender, Gene, and Denim, enter Side 7 in their MS-06F Zaku II mobile suits. Their plan is to spy on the colony, but they find things almost deserted, save for a lone car driving along, and one person that is visible.
That person is a young woman named Fraw Bow, who is running to her neighbor, Amuro Ray, accompanied by a basketball-sized green robot named Haro. Fraw finds Amuro tinkering with a microscope and informs him that there's a warship docking soon, and the whole sector is being evacuated as a result. While Amuro gets himself ready, Fraw goes outside to find their neighbor Hayato Kobayashi, who was driving the car the Zeon pilots had seen earlier. Fraw accosts Hayato for not warning Amuro, but he simply responds by bitterly commenting that if military engineers like Amuro's father hadn't come to the colony, they wouldn't need to evacuate. Amuro eventually comes out in his own car and he and Fraw drive off.
Near the colony, a Federation officer is speaking about the new warship which is docking, the SCV-70 White Base. He believes that White Base, along with another secret weapon, the mobile suit RX-78-2 Gundam, will give the Federation a great advantage in the war. On board the ship, Ensign Bright Noa tells Amuro's father, Tem Ray, that they will be docking soon. Tem hopes to mass-produce the Gundam in order to finally end the war.
On his Musai cruiser, located near the colony, Zeon officer Char Aznable is watching the situation with his second in command, Dren. Char knows well that the Federation has been working on the 'V Project', a large project to build mobile suits of their own intended to be more powerful than those used by Zeon. Char believes that he has just stumbled upon it.
Back on the colony, Gene and Denim watch as the Federation prepares a few mobile suits to be transported. Gene breaks away, ignoring Denim's orders and fires on the suits, destroying them. In an emergency shelter, civilians, including Amuro and Fraw, feel the explosions caused by Gene's attack. Amuro goes off to find his father such that the civilians can evacuate onto the warship.
Amuro drives off and comes across some Federation soldiers who are trying to get into an underground bunker. A missile fired by the Zeon mobile suits strikes next to their car and kills them. Among the shrapnel and debris that shoots out towards Amuro is a large classified book. He opens it and finds full instructions for the Federation's special mobile suit: the Gundam.
Slender contacts Char, telling him about the Federation's mobile suits. Gene and Denim continue to attack the base, and the evacuees begins moving to White Base. Amuro finally finds his father, who tells him to get in White Base. Tem then runs off to find some way to load Gundam into the ship.
Fraw shouts for Amuro to hurry and join her with the evacuees, but as she does, a missile strikes the crowd. She is okay, but the rest of the crowd, including her mother and grandfather have been killed in the explosion. Amuro tries to calm the devastated Fraw, and finally gets her to make a run for the spaceport before she shares their fate.
Amuro knows that he must help somehow and jumps in Gundam's cockpit. Amuro looks at the manual in an attempt to try to operate it. Gene notices the movement of Gundam and Amuro fires its vulcan cannons at him. Gene recollects himself and fires, but he realizes that the Zaku's rifles have no effect. Amuro finally gets Gundam on its feet, but becomes terrified when the vulcans run out of ammo. He sits there helplessly as Gene moves in for the kill. Before Gene can do anything, Gundam grabs the front of the Zaku's head, ripping it away and slamming the suit to the ground.
Amuro activates Gundam's Beam Saber and slices through the retreating Gene's Zaku, hitting it's engine. The destruction of the Zaku's engine results in a large explosion that blows a hole in the colony. This explosion takes in Tem and another engineer, sucking them into space. Knowing that he can't directly attack the Zaku's engine again, Amuro targets Denim's cockpit, killing him and making his Zaku useless. Bright gets the rest of the evacuees on White Base and sees that Amuro is the only living candidate to pilot Gundam.
Char watches from his Musai and realizes how much he's underestimated the Federation's mobile suit. He then fires two missiles towards Side 7.
- Characters Introduced: Amuro Ray, Char Aznable, Fraw Bow, Bright Noa, Hayato Kobayashi, Tem Ray, Paolo Cassius, Dren, Denim, Gene, Slender
- Deceased: Denim, Gene
- Mecha Introduced: RX-78-2 Gundam, MS-06 Zaku II, RX-75-4 Guntank (briefly), RX-77-2 Guncannon (briefly)
- Ships Seen for the First Time: SCV-70 White Base, Musai-class