The plot of Urban Assault is set in the future, where ozone depletion, termed The Big Mistake, results in destruction of the ocean's phytoplankton, causing the Earth's food chain to collapse. Scarce food supplies results in a resource war, and plasma formation technology — the ability to form solid constructions using only energy — allows military commanders to create entire armies to subjugate their foes. The technology was leaked to enemy factions, destroying fragile political alliances and launching the planet into a third world war. Citizens are forced into domed communities, which shield them from dangerous levels of UV radiation (to an extent) and filters the toxic air. However, most of the adult population had already consumed contaminated food, and most died within five years - regardless of location, domed or not.
A group of alien invaders, the Mykonians, view humans as being unworthy of such a resource-rich planet, and implant their Parasite Machine into the crust of the planet to draw energy directly from the Earth's core. The Parasite Machine is causing the Earth's core to cool, weakening its magnetic field. This will eventually cause solar radiation levels to rise and obliterate all of the planet's biomass, making it suitable for Mykonian colonization. In the campaign, Mykonian forces are usually present in northern Europe, where the cool temperatures allow for more efficient data transfer.
A second group of alien invaders, the plant-like Sulgogars, have invaded northern Africa, where the warm climate creates a suitable spawning ground. Only seen in mid- to late-game missions in northern Africa, the Sulgogars are the most challenging faction to defeat.
Three human factions exist as well; these include the Ghorkovs, Taerkastens, and the Black Sect.