The foggy episode opens up with Team Rocket stealing a stone from a small boy near a lighthouse. Ash and his friends hear Team Rocket passing by in their balloon and Team Rocket, noticing them back, take the opportunity to try to capture Pikachu. They not only fail, but lose the stone when their balloon bursts.
After Team Rocket blasts off again, the boy from the lighthouse, joined by his sister, meet up with Ash and company. The sister calls Ash a thief and tries to start a battle with him. She makes her brother help with his Plusle and Minun combination. Team Rocket reappears and the sister finally understands who the real thieves are. Team Rocket is quickly taken care of and then the sister explains that the stone is the source of light for the lighthouse and that it is charged by Electric-type Pokémon.
Ash and the gang go back to the lighthouse to relax. When Ash puts on his vest, the siblings get very excited. They explain that Ash fits the description given in a prophecy and that he must be the one who is supposed to not only protect the stone from an attack, but also teach the stone's protector how to fight. The boy is completely convinced that Ash is the chosen one.
Ash spends the rest of the day mentoring the boy until the fog starts rolling in and the lighthouse needs relighting. When they all reach the lighthouse to replace the stone, Team Rocket attempts to steal it and Pikachu using a Zapdos robot. They almost succeed before Ash and company catch up to them and send them blasting off again. The stone is recovered and replaced, and the boy truly believes that Ash is his mentor.
Ash and his friends attempt to navigate a foggy mountain road as they make their way to Mauville City, Brock suggests that it's too dangerous to go on, and that they should rest a while. Ash confirms this, as he soon trips over a hidden root and finds himself in a puddle of mud. During their rest, they meet up with Team Rocket, who immediately declares that they're going to capture Pikachu in order to make some sort of light stone that they stole work. James sends out his Cacnea and begins the assault with a Pin Missile, which is easily deflected by Pikachu's sturdy Iron Tail and sent back at them. Meowth loses hold of the light stone and it falls next to Pikachu, who climbs on top of it, preparing to use a Thunderbolt. Ash issues the command and Pikachu responds, blowing up Team Rocket's balloon and sending the three down into the water below. As Ash picks up the light stone, a voice calls out to him, naming him to be a thief. Alyssa, with her younger brother Thatcher in tow, challenges them to a battle for the stolen stone. She calls out her Magnemite, but it is quickly taken out by Pikachu's Quick Attack. She then asks Thatcher for help, but he says that he's never battled with his Pokémon before, so instead, he'll lend his "support." He calls upon a Plusle and a Minun, and together they use Helping Hand, revitalizing Magnemite. Alyssa orders her Magnemite to attack before demanding the light stone be returned. Ash soon realizes that the light stone belongs to the girl, but as he prepares to return it, Team Rocket suddenly reappears and Thatcher recognizes them as the real thieves. Wasting no time, Pikachu sends them away with a powerful Thunderbolt, and Ash returns the stone to its rightful owners.
The group heads for the lighthouse, and Alyssa explains that the light stone is the treasure of her village, and without it, she cannot operate the Mountain Lighthouse at all. She then shows the group how it works, using Plusle and Minun as an example; by using the power of Electric Pokémon, the stone shines brightly for all to see. As Ash puts on his jacket, Thatcher pipes up and declares that Ash is the "legendary hero." Alyssa tells him to calm down, and explains that long ago, a legendary hero dressed in blue accompanied by an Electric Pokémon brought the light stone to their village, Misty Village. Ash assures Thatcher that he is no hero, but the young boy insists upon it. He brings everyone to his house and pleads with Ash to teach him how to battle, and Ash agrees. They move to a quiet spot in the woods to begin their training. Ash starts off by saying that getting to know one's Pokémon and putting trust in them is one of the most important things to keep in mind. Before he is able to explain anymore, Alyssa exclaims that she must get back to the lighthouse because a heavy fog is beginning to roll in. Thatcher and the rest of the group decide to follow her.
Once they arrive, Team Rocket shows up once again, this time armed with a Zapdos robot. They slice the roof off of the lighthouse and swipe both the stone and Alyssa's Magnemite. Pikachu attempts to stop them with a Thunderbolt, but the attack bounced off, having no effect on the villains. They quickly snatch up Pikachu, throw Magnemite back at Alyssa, and make their getaway. Even though the thick fog veils their escape, Ash calls out to Pikachu and tells him to use his Thunderbolt on the light stone, which he does. The light stone, charged with electrical power, shines brightly within the fog. Now, with a beacon to follow, the group heads after the thieves. Team Rocket are soon found and, in another attempt to escape, they take to the sky once more. Thatcher orders his Plusle and Minun to use Helping Hand on Pikachu, which recharges the Electric Mouse to full power. Pikachu grins and lets loose a devastating Thunder attack, overloading the machine and sending in spiraling to the ground. Thatcher doesn't stop there, however; after another Helping Hand used on each other, Plusle and Minun rush the incapacitated machine using Spark, dealing with Team Rocket once and for all. With the light stone returned and Thatcher more confident in his Pokémon, the group bids them farewell and continues on their way towards Mauville City and Ash's next Gym Badge.