In the early 21st century, the majority of Earth's landmass is submerged due to rising sea levels. Enter the Fleet of Fog, a host of sentient alien battleships of unknown origin who easily decimate earth's naval forces. Humanity is now on the verge of extinction.

In the year 2039, the stalwart Captain Chihaya Gunzou and his intrepid crew on the Blue Steel fleet may be humanity's last chance to fight off the alien invaders. The Blue Steel fleet happens to contain a secret weapon that could turn the tide of war: a mysterious I-401 submarine that can transform into a girl.