Faced with growing civilian discontent and an intransigent admiralty, Captain Gloval disobeys orders in order to publicize the plight of the 56,000 civilians trapped aboard the SDF-1, a risk that pays off when the North American Ontario Quadrant agrees to the deportation of the civilian population to its territory. Unfortunately, Khyron launches another massive assault on the ship, forcing Gloval to use the new Omni-directional Barrier system to protect the battle fortress. The prolonged attack strains the new barrier system, causing a massive overload. A blast levels part of Ontario in a twenty-five mile radius, destroying a city and trapping Ben Dixon in the explosion. Faced with massive casualties on the ground, Ontario rescinds its offer and orders the battle fortress to leave its airspace. In the meantime, the ace Zentradi pilot Myria, seeking revenge for her humiliation at the hands of Max Sterling, arrives on the ship as another micronized spy.

Disgusted with Azonia's lack of success in capturing the battle fortress, Supreme Commander Dolza returns Breetai to command of the operation and puts nearly a million warships at his disposal. Shortly thereafter, Rico, Bron and Konda, the spies placed aboard the SDF-1 to study Micronian culture, report the strange living habits of Macross' civilians to their leader. Their enthusiasm for Micronian culture proves infectious, as many of the Zentradi soldiers flock around the returned spies to learn of Micronian culture. Back aboard the SDF-1, Gloval announces that the SDF-1 has received orders to take the battle fortress back into space with the civilians to protect the Earth-bound population.

The opening of Minmei's new movie lifts the spirits of those aboard the SDF-1. Though flush with success, Minmei arranges to reserve Rick a seat in the front row. Rick, unfortunately, does not get the message. Instead, he braves the crowd, leaving Minmei to see the empty seat up front. One scene in the movie requires Minmei to kiss her co-star, Kyle. The sight fills Rick with jealousy, compelling him to leave the theater. Outside, he runs into Lisa who is still haunted by the similarities between Kyle and her late fiancé, Karl. A sudden modular transformation traps Rick and Lisa together during a battle emergency, leaving the two to realize that they might be better off together.

Mistaking an intercepted transmission of Minmei and Kyle's movie for a battle record, Dolza becomes convinced that Micronians possess formidable fighting skills, leading him to redouble his efforts to capture the ship. In response, Breetai concocts a plan that will allow the Zentradi to place battle pods into the ship through the Daedalus arm so that the SDF-1 can be captured from within. Meanwhile, a group of renegade Zentradi led by Rico, Konda and Bron reduce themselves to Micronian size and plan to defect to the Robotech vessel.

In the midst of the attack on the Battle Fortress, many of the Zentradi soldiers switch sides, causing the assault to fail. Rico, Bron and Konda are the first to turn themselves over to the Robotech Defense Fortress, and are granted asylum by Captain Gloval. In the light of new scientific evidence indicating that humans and Zentradi have virtually identical cell structures, Lisa Hayes requests permission to travel to Earth to protect the right of the defectors and persuade the United Earth Government to give the Zentradi the option of living as Micronians instead of waging war.

Before leaving the SDF-1, Lisa contacts Rick Hunter by telephone to inform him of her plans. When Khyron's forces attack her ship, Rick comes to her aid and delivers her safely to Earth, conveying his deep-found respect for her using the signal lights on his Veritech. Rick returns to the ship to watch a press conference in which Kyle spontaneously announces his intention to marry Minmei. Though Minmei is shocked by the idea, Rick takes the development as proof that his own relationship with Minmei is dead in the water.

Noticing that Rick seems depressed, Max takes him to a local arcade to cheer him up. Once there, Max engages the micronized-Zentradi spy Myria in a video game, decisively beating her. Myria storms out of the arcade, frustrated with her inability to defeated the Micronian ace, but not before agreeing to meet him in the park the following day.