After many searches, Major Natalia "Nat" Kerensky decides to base their testing operations in Dante City on the Planet Dante, using the blackmarketeers as a cover. One evening, as Foster and the MechWarrior (player) are returning to their workshop, mysterious craft enter the Dante airspace and a Stiletto BattleMech lands on the ground and starts searching for them. They successfully evade the Stiletto and make it back to the workshop, where Nat instructs the player use a new powered armor suit called the BattleArmor to stop the invaders. After this, hundreds of dropships enter Dante's atmosphere. Mysteriously, one of these dropships is shot down by the others. After fighting to the crash site, a strange new MechWarrior by the name of Alera emerges, a space pirate with a jumpship named the "Jezebel". Later, the MechWarrior escapes an enemy port, and steals an enemy tank from 3 soldiers in an attempt to infiltrate the enemy. An allied APC then comes out and follows the MechWarrior on his way. The tank must go through two scans to advance the level, but however, the "Passenger Scan" warns the enemies that it is a trick, and the MechWarrior and his allies must escape the port with a tank.

After several confrontations with the enemy, it is discovered that the aggressors seek to access the Lostech blueprints and prototypes stored in the data cores to create an unstoppable army of mechanised soldiers to obtain dominance over the Inner Sphere, starting with mass-producing the Ragnarok Prototype model that discovered in the first game.

During the final mission, the MechWarrior with the aid of his allies uses the BattleArmor to destroy a half-complete giant BattleMech that uses all five of the data cores.