The episode begins with Ash and Misty waiting for Brock to finish cooking. Ash is polishing and admiring his Badges. Pikachu sees something in the bushes and catches everyone's attention. Togepi goes towards the bushes and three Murkrow emerge. Ash looks them up on his Pokédex. The Murkrow distract the group by dancing and singing, and then steal Ash's Badges before flying up onto a branch. Ash sends out Noctowl, who knocks the Murkrow out of the tree. Ash runs towards the Murkrow, but the Murkrow fight back by kicking mud into Ash's face, and then fly off.
Noctowl follows them, but they attack all at once and knock it out. Brock uses his Golbat's Supersonic to track the Murkrow. Ash goes over asks them for the Badges, but they fly off. Golbat tries to follow, but it gets knocked out. Pikachu knocks out the Murkrow all at once with a Thunder Shock, causing them to fall to the ground. Ash and Pikachu move to get the Badges back, but Pikachu is captured by Team Rocket. As Team Rocket begins to float away on their balloon, the Murkrow pop the balloon and steal James's bottle cap collection, which really angers him. James tries to get them, but he trips. Meanwhile, Ash manages to free Pikachu from the cage he was in. Pikachu runs after the Murkrow, but they fly away. James continues to try and get back his prized collection by trying to capture the Murkrow with a net. Team Rocket pulls on the rope connected to the net, but it turns out that the net caught a boulder instead, causing Team Rocket to get thrown away. After another win, the Murkrow yet again admire their loot.
Ash is determined to get his Badges back and uses his Bulbasaur to climb the hill. On the top of the hill, he spies on the Murkrow and makes a plan. Ash tries to sneak up to them and snatch the Badges, but he gets pecked and knocked down the hill. The group devises another plan in which they hold up shiny objects to distract the Murkrow while Brock and Pineco get the Badges back. The plan is successful until Togepi blows their cover. Ash has a plan and sends in Noctowl. Noctowl flies in and plays dead, causing the Murkrow let their guard down, and Noctowl snatches the Fog Badge. Noctowl starts to fly away, with the Murkrow close behind, when a sudden gust blows all of the Pokémon to the ground. It turns out to be Team Rocket in a giant robot resembling a giant Murkrow. They use their machine's vacuum to suck up all of the shiny objects that the Murkrow collected.
The Murkrow are about to be sucked away, but Ash saves them. Team Rocket is about to confront the Murkrow, but Noctowl stops them before they can do anything, so Team Rocket turns and grabs Pikachu. Noctowl and the Murkrow team up and fly in all different directions. The robot moves in all different directions as well, which results in the robot short-circuiting, causing it to release Pikachu. Pikachu delivers a Thunderbolt which sends Team Rocket blasting off again. Ash gets back his missing Fog Badge and thanks the Murkrow for their help. With that, Ash and his friends are off for more adventures.