It is the year 2201 and expanding technologies have given man the power to live anywhere in space. Amidst this backdrop, the story of Target Earth begins with a war between Earth (and its colonies) against a cyborg army returning from the farthest reaches of space. In the game's early stages, the nature or purpose of these cybernetic adversaries, named Chron, is unknown. However, it is later revealed that Chron are the survivors of a failed space expedition (Outer Space Expeditionary Party) sent by Earth a hundred years earlier.

The Earth Defense League fights to defend Earth. The heart of the defensive movement is the Assault Suit—a twelve-foot-tall armored battle machine with awesome fighting capabilities. The player is Rex, an Assault Suit Wing commander and master at Assault Suit combat. The battle begins on Ganymede but shifts to battles in space, on the Earth, and inside enemy outposts.