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Humanity is the midst of a long war against an alien alliance called the Covenant who have been wiping out colony after colony. You hero is Master Chief, stationed on the Pillar of Autumn, a ship which finds itself on Halo, a planet-sized ring of mysterious origin, preparing for a Covenant full-out assault.
Halo takes place in a science fiction universe created by Bungie Studios specifically for the game. According to the story, the overpopulation of Earth and the realization of faster-than-light travel have caused the human race to colonize other planets. A keystone of these efforts is the planet Reach, an interstellar naval yard responsible for building starships, and a hub of scientific and military activity. A secret military endeavor, dubbed the SPARTAN Project, was established on Reach to create an army of biologically-engineered, cyborg "super-soldiers". Thirty-two years before the beginning of the game, a technologically advanced collective of alien races, the Covenant, began to attack human settlements. Declaring humanity an affront to their gods, the Covenant launched a holy war against the human race. The United Nations Space Command experienced a series of crushing defeats, and, although the super-soldiers of the SPARTAN-II Project fought impressively against the Covenant, they were unable to turn the tides of war.
To prepare for a mission to discover the location of the Covenant homeworld by boarding one of its starships, SPARTAN-II soldiers were recalled to Reach for further augmentation. Two days before the mission was to begin, Covenant forces attacked Reach and destroyed the colony. A starship, the Pillar of Autumn, survived the onslaught and initiated a random jump to slip space (similar to hyperspace), hoping to lead the enemy away from Earth.
The titular Halo is an enormous, ring-shaped artificial space habitat/planet, which (according to Bungie Studios) has a diameter of ten thousand kilometers. Halo sits at a Lagrange point between a planet and its moon. Centrifugal force created by the rotation of the station, combined with artificial gravity generators provide the ring's gravity.