After the AEUG successfully stole the Titans' RX-178 Gundam Mk-II, two of the stolen units were sent to Anaheim Electronics for analysis, reverse engineering, and duplication of their technology. Engineers found that the Mk-II was a return to the concept of a "Humanoid weapon as an enhanced space suits", the same concept behind the earliest MS. It was also known that the Mk-II suffered from high structural complexity and low frame strength, problems specific to the EFF's technology.
A group of technical experts created the Gundam Mk-III, addressing the issues found on the Mk-II. It featured an improved, simplified version of the Mk-II's complex movable frame, reducing its vulnerability. It was then thoroughly examined and brought back to the planned strength while not compromising previous improvements. The Gundam MK-III has a pair of wing binders which mount several thrusters to increase speed and mobility. It also has lighter Gundarium alloy used in the construction of its frame and armor. Furthermore, considerable improvements were made to bring back organic movements to the joints, similar to those of the human body.