Thunder Force III takes place about 100 years after Thunder Force and directly after Thunder Force II. Despite their successes, the Galaxy Federation has not been faring well in their battle against the ORN Empire. ORN has installed cloaking devices on five major planets in their space territory that conceal their main base, making it difficult for the Galaxy Federation to locate and attack their headquarters. Also, ORN has built a remote defense system to protect itself named Cerberus, which is especially efficient at neutralizing large ships and fleets. Knowing this, the Galaxy Federation creates the FIRE LEO-03 Styx; a craft small enough to avoid detection by Cerberus, yet equipped with the firepower of a large starfighter. The Galaxy Federation deploys Styx (which is controlled by the player) on a mission to destroy the five cloaking devices, infiltrate the Empire's headquarters, and destroy ORN emperor, the bio-computer "Cha Os".