Most of the major characters from the Extra timeline are present in Unlimited, notably excluding the Unlimited world's Takeru, who is said to be dead, and Sumika, who does not seem to exist in the Unlimited timeline. Subsequent battles with BETA resulted in the global population dropping to 2.4 billion with most of mainland Eurasia having been lost by the time the game starts in 2001.

Muv-Luv Unlimited explains that the BETA first arrived on Earth in 1973 (in China and Canada) after arriving on the Moon in 1967 and being spotted on Mars in 1958. Takeru later learns that he is in an alternate world to Extra, where aliens called BETA (an acronym for ' Beings of Extra Terrestrial origin which are Adversary of the human race') have invaded and mankind fights back against the alien aggressors with mecha called Tactical Surface Fighters, ( 戦術歩行戦闘機, Senjutsuhokōsentōki) usually referred to in Japanese as simply Senjutsuki ( 戦術機). Upon leaving his house, he finds his neighborhood destroyed and Sumika's house crushed under the wreckage of a large mecha. The second part, Muv-Luv Unlimited, starts with Takeru Shirogane waking up in his bed, reminiscent of the start of Muv-Luv Extra however, Takeru quickly realizes that neither Meiya nor Sumika come to wake him that morning. In addition, the player may also make decisions to choose between one of the three girls in the main supporting cast: Chizuru Sakaki (voiced by Masayo Kurata), Miki Tamase (voiced by Hitomi), and Kei Ayamine (voiced by Nagashima Yuuko).

At the conclusion, Takeru must choose between which of the girls he truly loves. At first, he believes the girl was Sumika, but eventually realizes that it was actually Meiya. As the story progresses, both girls compete for Takeru's affections while Takeru has recurring dreams about a marriage promise he made to a girl long ago. The young woman, Meiya Mitsurugi (voiced by Aki Okuda in the Windows version and Kazumi Okushima in ports), is the heiress to a financially powerful family and is determined to be Takeru's bride. The first part, titled Muv-Luv Extra, features playable character Takeru Shirogane (voiced by Takeshi Aiba in the Windows version and Soichiro Hoshi in ports) who wakes up one morning to find a beautiful young woman sleeping in his bed, just as an infuriated Sumika Kagami (voiced by Hiroko Taguchi, credited as Rika Fujiwara in the Windows version), Takeru's neighbor and childhood friend, comes to wake him up that morning. The visual novel Muv-Luv is divided into two parts.

Muv luv wiki eishi