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2160-2200: This is a period of brutal unrest in Human history in which National governments and break-off factions fight for control of Earth and its colonies.

As overpopulation and unrest mounted on Earth, a number of new political movements were formed including the neo-communist Koslovics led by Vladimir Koslov and the neo-fascist Frieden based on the Jovian Moons, which attacked the UN Colonial Advisers on one of the moons, and UN-sponsored military forces began a pattern of massive build-ups which culminated in the Jovian Moons campaign, the Rain Forest Wars and the first Interplanetary War. After the successful Marine attack on Mars, recruitment drives and propaganda tactics strongly bolstered UNSC forces. They defeated the Koslovics and the Frieden on Earth and crushed their remnants throughout the Solar System. Both factions were defeated in the face of massive, unified UN military.

In the year 2291, the UNSC successfully developed humanity's first Slipspace drive, the Shaw-Fujikawa Translight Engine. For the first time in history, the rapid colonization of other worlds was made possible. By 2390, 210 worlds had been occupied by humans, and were being actively terraformed to suit man's needs. These worlds were to become known as the Inner colonies. By 2490, the UNSC's fledgling interstellar empire had expanded to over 800 planets throughout the Orion Arm of the Milky Way galaxy. During this period, the planet Reach became the headquarters of the UNSC military, and was destined to become the most heavily fortified world under human control.

In 2517, several years before contact with the Covenant, the UNSC military embarked on a secret project to create a group of elite soldiers that would deal with occasional unrest in the Colonies. Codenamed SPARTANs, these genetically enhanced troops were trained from the age of 6 into a life of battle, and became a great asset against the Covenant. While humans suffered defeat after defeat in space, they could almost always prevail with the help of the SPARTANs in ground engagements. The main character of Halo's gameplay, John-117, is a veteran SPARTAN of the SPARTAN II project after an unfortunate failure of the first SPARTAN program (code name Orion). All SPARTANS II were given special armor designated MJOLNIR, which can increase their strength and speed. They were the only ones who could wear it as those without physical augmentation would not be able to withstand the reaction times of the armor and die.

After first contact with the Covenant was made on the colony of Harvest in 2525, a series of brutal engagements followed. Admiral Preston Cole's fleet managed a victory at Harvest, but at a high cost - two thirds of his ships were destroyed. Despite significant tactical brilliance on the part of Human commanders, Covenant technology guaranteed a four to one kill/loss ratio in most space battles. One by one, the Outer Colonies fell below the onslaught, and by 2535, virtually all had been destroyed.

By 2552, the Covenant had destroyed many of Humanity's Inner colonies. In a move of desperation, UNSC orders a secret plan to capture a Covenant ship using a SPARTAN task force and find the coordinates of their home planet. All of the Spartans except three are chosen for this mission, and, led by John-117, board a specially outfitted ship known as the Pillar of Autumn (under the command of Captain Jacob Keyes). This plan, however, is interrupted when the Covenant launch a surprise attack on the fortress world of Reach.

During this battle, Reach is overrun and the human fleet is obliterated. Worse still, John-117 thinks that all of the SPARTANs but himself are killed on the surface of the planet. The (supposedly) last remaining Spartan, John-117, escapes with the Pillar of Autumn. In accordance with the Cole Protocol, the Autumn makes a blind Slipspace jump, and emerges in the vicinity of an unexplored and remarkable world.

The Pillar of Autumn exits Slipspace to find a mysterious ring shaped space station orbiting a gas giant. The ring, quickly named "Halo", is obviously artificial. A Covenant fleet, however, is also present, and a subsequent battle heavily damages the Autumn. Captain Keyes initiates the Cole protocol 2 - all records of Earth's location are erased, the shipboard AI Cortana is given to John-117 to protect from the Covenant, and the Autumn is crash landed onto Halo. Cortana leaves the Autumn with John 117 in a Bumblebee escape pod which also crash lands on Halo.

Game play begins in earnest with John-117's escape from the Autumn, and continues upon landing. The player will soon discover the origins and purpose of this world - and uncover a threat that forces even the Covenant into retreat.

As a literary side note, the ring, "Halo", borrows heavily from the Ringworld of Larry Niven and the Culture Orbitals of Iain M. Banks.

UNSC Pillar of Autumn emerges from Slipspace to find a huge ring — a "Halo" floating in space. The main character, Master Chief Petty Officer John-117, is aboard the Pillar of Autumn when the ship comes under attack by the Covenant, an alliance of aliens and the arch-enemy of humanity. John-117 evacuates the doomed ship for the surface of Halo to protect the Autumn's artificial intelligence, Cortana. She carries highly sensitive military information, which would prove disastrous if she were captured by the Covenant. With the UNSC Marines by his side, Cortana providing direction, and his assault rifle ready and loaded, John-117 sets to finding out the mysteries of Halo and defeating the Covenant.

The first few levels of the game deal with an attempt to reach Halo's Control Room to uncover its purpose. It is soon discovered that during an attempt to take control of a research facility, both human and Covenant forces have accidentally released something: the Flood, as a result of the battle. The Flood is a parasitic race which received their name because of the way they swarm over all resistance. Free for the first time in thousands of years, the Flood sweeps across Halo, devastating Human and Covenant forces alike. The release of the Flood prompts 343 Guilty Spark, the eccentric Forerunner artificial intelligence, to activate Halo's defense systems. Most obvious among these are the Sentinels, flying robots equipped with beam projectors, but Halo's actual weapon is much more subtle and far more dangerous. Halo can fire a pulse that will wipe out all sentient life in a 25,000 light year radius. As sentient life is the Flood's food, the Flood will not be able to survive, and will therefore perish. Though the Installation only has a maximum effective radius of 25,000 light years, the pulse will trigger other installations as well. This system is designed to stop the Flood from spreading through the universe if they escape confinement from Halo, by starving the Flood of any life source large enough to sustain them. This is the only possible solution to the destructive parasite.

Naturally, this would wipe out Humanity as well as the Covenant, and so the final levels of the game revolve around John's attempt to destroy Halo before it fires.

The game leaves the story open to further developments, with the revelation that there are several Halo ring worlds in the galaxy, due to Halo being numbered Installation 04 by 343 Guilty Spark, the Monitor of the Installation. It is revealed later in Halo 2 that there were seven Halos before Installation 04's destruction.