Cima's blackmailing apparently works, as Anaheim asks Nina to be reassigned away from the Albion and out of the mobile suit development team altogether. Keith, who dates Mora, offers Kou movie tickets so he can ask Nina out after a field test. He does make a move, but a remark about the tests angers Nina again. Meanwhile, Kelley gets paid in gold bullion for his work on the Val Walo, but is shocked to hear that the Zeon forces do not want him piloting it for the new campaign. Incensed, Kelley takes out the mobile armor and challenges Kou to fight him so he could prove himself worthy of joining the Delaz Fleet again. When Nina gets in the way, Kou finally admits his feelings for her and defeats Kelley, who does not bail out from the exploding Val Walo because he never installed an escape system.

A few days out of Von Braun, Burning continues to train Kou and Keith, who later eggs him to try giving Nina a chance. Keith also earns Mora's ire for showing him Monsha's private collection of Nina pictures. A resupply rendezvous by a Federation ship is cut short as the Albion detects the Federation flagship Birmingham, with General Green Wyatt aboard - meeting with Cima. In the midst of the ensuing battle, Burning retrieves a briefcase that contains files for something called "Operation Stardust" and talks with Kou about them. However, a minor hit on Burning's GM Custom during the battle turns fatal, as the mobile suit careens out of control and explodes. Uraki is promoted to junior lieutenant as the crew mourns Burning's death.

Gato retreats after the nuclear strike destroys two-thirds of the Federation's fleet, but runs into Kou. As Nina breaks down watching them fight, both of their mobile suits take heavy damage and the pilots flee before they explode. Meanwhile, Cima's fleet hijacks two colonies in transport and later blow off one mirror each from them. When the Albion crew is informed of the colonyjack, Nina correctly theorizes that the colonies will crash into each other, with one in direct course for the Moon. She also reveals the existence of a third Gundam built under the GDP.

Kou and Gato, now in their mobile armors, finally take each other on as the Albion crew tries to stop the colony before it passes the minimum limit for terminal entry. Cima's crew takes Delaz hostage aboard his flagship, the Gwaden. At Jaburo, General Kowen desperately tries to convince EFSF supreme commander Gen Gene Collini of mobilizing the military's full might to stop the colony, but Jamitov Hymen has Kowen taken away. Delaz discovers that the Federation has deployed the Solar System II mirror array past the terminal entry point and encourages Gato to see the operation through - before Cima kills him. Out of rage, Gato drives one of the Neue Ziel's claws at the Gwaden bridge.

The battle to stop the colony goes full-blast, with the Federation and Cima's forces working together to protect the Solar System II on one hand and the Delaz fleet shepherding the colony on the other while the Axis Advance Fleet stands back. Kou kills Cima in the fracas. The Solar System II fires, but Gato destroys the command ship, resulting in a weaker blast that barely damages the colony. As it breaks through the solar array, Gato enters the colony and inputs the final course corrections. Kou tries to stop him, but Nina interferes and protects Gato as they leave, revealing that they were once lovers. The two pilots continue to fight after Gato has Karius bring Nina to safety. The Solar System II remnants fire again, with many forces on both sides destroyed as the colony crashes into the Midwest. The Federation orders the Axis Advance Fleet to leave the Earth Sphere immediately, having overstayed their welcome, but Gato leads the Delaz Fleet survivors to attempt a breakthrough and dies in a kamikaze attack on a Federation ship. Several weeks later, Hymen and Bask Om announce the creation of the Titans. All records of Operation Stardust and the GP are erased, including Kou's one-year hard labor sentence. He eventually reunites with Nina, Keith, and Mora.