The player takes on the role of the top fighter pilot, Mobius 1, of the Mobius Squadron in the air force of the Independent States Allied Forces (ISAF), fighting against the Erusians who have occupied almost all of the Usea continent after an apocalyptic event in 1999. A massive asteroid, codenamed Ulysses 1994 XF-04 struck Usea, killing 500,000 people and turning many into refugees. Erusea used this as an opportunity to occupy the continent after a prolonged military buildup. The Erusians have achieved supremacy via the superweapon Stonehenge, a battery of railguns which was originally designed to destroy asteroids but has been found to be effective against airplanes as well, due to the massive shockwave it releases when it fires. Consequently, ISAF has been pushed back to the eastern coast of Usea.

Between the missions the story is told through letters written to Mobius 1 from a boy whose parents were killed when a fighter jet crashed into their house in San Salvacion. The fighter jet was shot down by Yellow 13, the Erusians top fighter pilot, and a member of their Yellow Squadron (the Erusian equivalent of the ISAF Mobius Squadron). As he is forced to move into a nearby occupied town, he befriends Yellow 13 after meeting him and the other Yellow Squadron members in a bar.