A battlegroup is a group of one to fourteen ships, either spawned in HyperSpace or guarding a TrueSpace star system. It is treated as a single entity (represented in HyperSpace as a black gravity well and in TrueSpace as a single, non-rotating ship of the respective race) and the ships constituting it cannot separate. Colliding with a battlegroup will initiate an encounter (if the battlegroup is encountered in HyperSpace, the encounter will take place in TrueSpace, in an area defined "Deep Space" — and if in battle with the alien ships encountered, a planet will still be available).
- In HyperSpace, battlegroups spawn randomly at most once a day and follow the Flagship. Notice that they simply head towards it, instead of heading a bit further to collide with it if it does not change course.
- In TrueSpace, battlegroups circle at different ranges around planets, switching randomly between them. Most battlegroups can only be seen in the closest zoom level (focused on a planet), though they may randomly switch back to the main zoom level.
If the Flagship gets close enough to a TrueSpace battlegroup, regardless of whether they are friendly, neutral or hostile, all battlegroups in the system will head on an intercept course with The Captain's fleet — including those at different zoom levels. After the encounter is finished, they return to patrolling unless they are hostile.
There may not be battlegroups pertaining to different species in a single star system, even if their Spheres of Influence meet.