En route to the ABC Islands, Ash and the gang are passed on the way to Island A by a group of children racing on top Huntail or Gorebyss. It turns out that there is a fierce rivalry between the citizens of Islands B and C: Clamperl evolve into Gorebyss on Island B, while they evolve into Huntail on Island C. The children all attend school on Island A, and fight often during class.
At the Pokémon Center they find Professor Birch in a pool. He is studying the different Clamperl Evolutions, and the kids travel with him to a cave on Island C where Clamperl are known to evolve. They are followed by a boy named Keith from Island B. They travel to a similar cave on Island B, followed by Nancy from Island C. When everyone returns to the Pokémon Center on Island A, they find out that Keith actually wants a Huntail and Nancy wants a Gorebyss. After doing some research, Birch reveals that the Evolution is dependent on the items Deepseatooth and Deepseascale, but he doesn't know how.
Team Rocket attacks them at the PC, but Keith and Nancy's Clamperl use Water Gun while Pikachu drives them off with Thunderbolt. Professor Birch and the kids return to Island B, where they put a Deepseascale on Nancy's Clamperl. On Island C they put a Deepseatooth on Keith's Clamperl. Neither Pokémon evolves, so Birch beams them to the Pokémon Center for further research.
Back at the PC, when the kids take out their Clamperl, both Pokémon evolve: Nancy's into a Gorebyss and Keith's into a Huntail. Team Rocket attacks again, but the newly evolved Pokémon drive them off with Confusion and Screech.
The rivalry between Islands B and C ends and the people start trading their Clamperl back and forth to get the evolved Pokémon they want. Ash and friends leave on a ferry for their next destination.
The group is aboard a boat, speeding towards the A-B-C Islands. Suddenly, a bunch of kids race by them, riding their Huntail and Gorebyss. Ash and May check out Huntail and Gorebyss in their Pokédexes, and learn that they both evolve from Clamperl. Turning their attention back to the race, they see one girl get knocked off her Huntail. The group stops to see if she’s okay, and the girl is quick to re-enter the race. Then, a young boy and girl go by on little pedal-boats, deep in an argument over whether Gorebyss or Huntail are better. All of this has aroused the curiosity of Ash and his friends. Meanwhile, not far away, Team Rocket are pursuing the group in their Magikarp submarine. Suddenly, they get stuck between two boulders underwater. They start pedaling at full power to try to break free, but the submarine's hull buckles, letting water gush in.
By now, Ash and his friends have reached the Pokémon Center on Island A, and greet Nurse Joy. Brock tries to flirt with her, but Max drags him away. Joy is briefly interrupted by a sudden call from a local Trainer called Midori who has her Corsola transported over for treatment. After hearing some loud voices, Nurse Joy shows the group her class of students, which are the very same children that were racing earlier. Joy announces that the next class will take place by the outdoor pool, much to the kids' delight. On the way, Joy explains about the rivalry between the Huntail Trainers on Island C and the Gorebyss Trainers on Island B, and the regular water races they have. Joy and the group arrive at the pool, where they are all surprised to see Professor Birch. He explains that he travelled to the islands for his is new assignment - to uncover how Clamperl evolves into either Huntail or Gorebyss. May assumes he must have been doing some sort of research in the pool with the Huntail and Gorebyss, but Birch admits that he was just playing with them for now. Birch fields a couple of questions from the kids, then explains that Clamperl evolve using either the DeepSeaScale or DeepSeaTooth, and produces models of the items to show the kids. He goes on to explain that he had heard that when Clamperl are placed in the water in the two other islands, they tended to soon evolve into either Huntail or Gorebyss, so he suspects he might be able to find the DeepSeaTooth and DeepSeaScale on those islands. Ash says he and his friends would love to come along, and Birch agrees to let them come.
The group gets ready to take off for Island C in a speedboat, and Nancy decides to join them. Unbeknownst to them, Keith is following in his pedal boat. Having reached Island C, Birch tastes the water from a waterfall inside a cave there. Just as he suspected, the mineral content seems very high, so he takes a water sample. Suddenly, the sound of a footstep behind them betrays the presence of Keith, much to Nancy’s annoyance. Keith is anxious to evolve his Clamperl into a Huntail, and had been eavesdropping. Birch explains that he fully intends to investigate both islands, and Keith accompanies them to Island B. This time, Nancy follows in the pedal boat. Birch again tastes the water, takes a sample, and Nancy accidentally betrays her presence. This time it was her turn to eavesdrop on the enemy. Back at the lab on Island A, Birch analyzes the water, and finally thinks he has the scientific details figured out. Keith and Nancy run up to the group, anxious for news, and argue briefly before May and Birch calm them down. Nancy admits that she really wants a Gorebyss, and Keith adds that he likes Huntail better. Birch asks to see their Clamperl, so they all go out by the pool, and the kids send out the Clamperl. After a visual examination, Birch says they look healthy, and if everything works out, they should each be able to evolve. He also reveals from his analysis that the water on Island B contains DeepSeaScale fragments, while Island C is rich in DeepSeaTooth minerals.
Meanwhile, Team Rocket has made it to the pool, and they are watching the scene from their sub. Meowth suggests they give all the Huntail and Gorebyss to the Boss, and Jessie likes the plan as well. The trio suddenly makes their appearance, and they reite their motto. They send a net out from their sub to catch the Huntail and Gorebyss, but Ash quickly calls out Corphish to cut the net. Jessie sends out Seviper, who attempts a Bite attack. Corphish counters with Harden, and Seviper just ends up hitting its head. Ash then orders a Crabhammer, and Corphish uses it to slam Seviper into the water. James sends out Cacnea, who after hugging James, fires a Pin Missile at the Clamperl. The kids tell their Clamperl to use Iron Defense. The Clamperl close their shells, and the pins just bounce off. Jessie orders a Poison Tail, and Seviper jumps out of the water, but Corphish counters with Bubble Beam. Both Clamperl then use Water Gun together, sending Seviper and Cacnea back to the sub. Finally, a Thunderbolt from Ash's Pikachu sends Team Rocket blasting off. The kids celebrate, and Birch says it was now time to go look for the evolution items.
They go back to Island B to look for a DeepSeaScale. Keith finds it, and gives it to Nancy, who in turn gives it to her Clamperl. She expects an evolution, but nothing happens, so Birch suggests sending Clamperl to the Pokémon Center, since Clamperl won't evolve right away when given the item. The girl agrees and they do so from the cabin on the island. On Island C, they again search, and find a DeepSeaTooth. Fittingly, Nancy finds it, and gives it to Keith, who gives it to his Clamperl. His doesn't evolve right away either, so he sends it to the Pokémon Center as well.
Back at the Pokémon Center, the kids receive their Clamperl from Joy and send them out. They haven't evolved yet, and Birch is briefly puzzled, but then they start to glow, and evolve into Huntail and Gorebyss. The kids take their newly evolved Pokémon out to the pool and watch them swim for a bit. Suddenly, Team Rocket shows up again, this time in a giant Kingler mecha. Meowth sends one of the mecha's claws at Gorebyss. Nancy tells Gorebyss to dodge, and Keith tells Huntail to try a Bite attack. Huntail charges forward, but just bounces off the mecha. Ash sends out Grovyle to use Bullet Seed, but to no avail, as that bounces off the mecha as well. Huntail and Gorebyss use a combined Water Pulse, which knocks the mecha back briefly. Team Rocket quickly recovers and Meowth fires a claw at the two Pokémon. They dive in the water to dodge, but a net from the other claw catches them when they resurface. However, Grovyle promptly uses Leaf Blade to cut them free. Nancy orders a Confusion from Gorebyss, and it levitates the mecha. Keith takes the opportunity to order a Screech from Huntail. Pikachu then uses Thunder to blast off Team Rocket once more.
Now that the danger is gone, the kids admire how well their Pokémon worked together. May suggests that maybe now their feud can end, and the kids agree. Nurse Joy calls out to the group, saying their boat is ready to leave. Professor Birch wishes Ash and his friends all the best, and admits he’ll be staying on the islands for a while to continue his Clamperl research. Keith and Nancy, riding their Huntail and Gorebyss, catch up to the boat and tell the group that the Huntail and Gorebyss Trainers have finally patched things up, now that they understand more about their Pokémon. After hearing this pleasant news, Ash and his friends wave goodbye to the kids as their boat rides off into the sunset.