The plot, taking place in the distant future, revolves around a war between a group of corporations fighting over territorial disputes, and eventually a prototype fighter known as the X-49 Night Raven. During a period of financial chaos, the many governments of the world have eroded to nothing but corporatocracies. These corporations, not unlike the governments they control, have disputes often, and eventually a war is sparked.

General Resource LTD. is a successful company, formed through a merger of many worldwide financial assets. It was once Gründer Industries, a military corporation found in Ace Combat 5. Focusing on the domination of common products, General Resource is always in constant disagreement with Neucom. A massive corporate war was sparked when General Resource's armed forces engaged fire with Neucom's forces. General Resources has a para-military force called General Resources Defence Force (GRDF). Abyssal Dision and Keith Brian are members of the GRDF.

The UPEO (Universal Peace Enforcement Organization) is a military organization controlled by the Neo United Nations (NUN) and originally a General Resource puppet, ultimately dedicated to stopping the corporate war. However, it is referred as a paper tiger, since it requires weapons from the corporations to support itself. UPEO is supervised by NUN General Secretary Gabriel Clarkson. UPEO's military arm is the Special Armed Response Force (SARF). The main characters, Rena Hirose, Fiona Fitzgerald, and Erich Jaeger are members of the SARF. Gilbert Park is the commander of the UPEO and SARF. However, he is distrusted by almost every character in the game. (reason of which later revealed) After all hell breaks loose at the near the end of the game, main character and Erich decide to take the battle to Park in order to save the UPEO from corruption and stop the Ouroboros, while trying to save Rena from her cruel fate.

Neucom Inc. is a generally struggling corporation that focuses on progress through technological advances. It was once the Erusian Air and Space Administration (EASA), a corporation found in Ace Combat 04. Formed by a group of defecting scientists from General Resource and a former government agency, Neucom has similarities to real-life defense contractor McDonnell Douglas. Neucom's para-military force is named Neucom Emergency Unit (NEU) and it's the only side that uses its own design aircraft. Cynthia Fitzgerald is a member of the NEU (as is her sister Fiona, defecting along with the main character if player wishes, in the later missions). For some reason, Neucom is named Neuwork in the seriously downgraded English versions of AC3.

Ouroboros is a mysterious terrorist organization formed from members of all units, with its own shadowy agenda. According to the story, Abyssal Dision seems to be its lead pilot and executive officer while Gilbert Park, commander of the UPEO, is actually its leader, operating behind the scenes. Cynthia (and main character, if player wishes) later join Ouroboros for unknown reasons although she later realizes the madness behind the organization's true intentions and decides to escape. (again, with main character)