The Death Egg is sent crashing into the top of the Lava Reef Zone during the events of Sonic & Knuckles. In a last ditch-effort to fix the Death Egg, Robotnik hatches a scheme to steal the Master Emerald from Knuckles. He does so, and Knuckles sees Sonic and Tails as evil and the scientist as the good guy, but realizes that Sonic and Tails are the real good guys once Eggman steals the Master Emerald right from Knuckles. The three of them set off to catch Robotnik, and Sonic and Tails leap onto the now-rising Death Egg from a tall pillar in the Sky Sanctuary. Sonic battles his way through a horrendous Zone, full of rocket launchers, antigravity chambers, electrical hazards, ring shooters, and some very mean Bdniks. Instead of a single mini-boss, as in the rest of the game, Sonic has to face two. First Red Eye, then after Act 2, the Death Ball, controlled by the doctor himself, who stands out of harm's way, controlling his latest contraption with a control board of sorts. After this, Robotnik flees, leading Sonic into the final fight against Kyodai Eggman Robo.
Sonic then faces off against a giant mech named Kyodai Eggman Robo. This giant robot looks like an EggRobo for the most part, except for its staggering size; its eye is as big as Sonic! The Robo attempts to squish Sonic with its 3-fingered hands, of which each finger can be destroyed with 3 hits. After destroying the robot's hands, the mech stomps after Sonic, shooting flames from its nose. A quick bop on its nose tempts Robotnik to open the robot's large chest, where the Master Emerald can be seen. This huge compartment also contains a weapon powered by the emerald; a sort of magnifying glass, which uses the emeralds power to shoot a laser beam at Sonic. Although dangerous, this cannon is the only weak point on the entire robot. Sonic destroys it and the gargantuan robot falls for good as the Death Egg begins falling apart due to its collapse. The scientist flees from the scene in his Eggmobile with the Master Emerald, but is quickly stopped by a few hits from Sonic. The Death Egg then completely crumbles, removing Sonic's foothold.
If Sonic obtains all the Chaos Emeralds, he will progress to The Doomsday Zone. Otherwise, the Master Emerald will remain in space and the game will end with the Floating Island remaining in the ocean but free from Robotnik's control.
Through the Sound Test/Act select, Knuckles can enter Death Egg Zone, but he isn't able to complete Act 1 on account of his inability to jump very high in which the sub-boss, Red Eye, is out of his jumping reach.
In the Sound Test/Act select, it is spelled without a space in the name, reading "DEATHEGG".