The creation of Axem Blue dates back during the events of Super Mario RPG: Legend of the Seven Stars. While Smithy was creating the five Axem Rangers, he has yet to complete the powerhouse of the bunch, Axem Blue. Before he could finish his secret creation, Mario and his friends had overthrown Smithy, and all robotics, and technology that was not originally inside Bowser's Castle, was thrown out.
Several years after the events of SMRPG, Fawful had landed in Dimble Wood after being defeated by Mario, Luigi, and Bowser. He soon discovers Axem Blue's carcass in a huge garbage heap, and decides to reconstruct him into a modern killing machine.