Team Magma and Team Aqua continue to fight on Monsu Island. The Red Orb, which can control Kyogre, is currently held by the Team Aqua Leader Archie. Archie merges with the orb and now crazed as a result, orders Kyogre to sink the island.
Everyone tries to flee into the ruins on the island, while Lance challenges Kyogre with his Dragonite. Dragonite's Hyper Beam is not strong enough to stop the ancient Pokémon.
Team Rocket still wants to steal Groudon, restrained inside the Team Aqua base. Instead, they are attacked by a possessed Pikachu, who awakens Groudon. The giant Ground-type leaves the base and begins a massive battle with Kyogre, but the two are evenly matched.
The kids find a way to distract Kyogre, which gives Groudon the opportunity to defeat the Water-type. The orbs leave the bodies of Archie and Pikachu, floating up in the air until they merge and then disintegrate. Archie and Pikachu both come back to their senses, while the two Legendary Pokémon retreat back into their ancient slumber.
Shelly informs Archie that Kyogre is free from captivity. Archie is thrilled and summons Kyogre with the Red Orb. Maxie calls for him to stop, so Shelly orders Team Aqua to bring out their Pokémon to protect Archie. They send out their Walrein, and Team Magma sends out their Mightyena. As the Pokémon battle it out, Archie makes his escape in a mini-helicopter. Tabitha advises Maxie that they have to stop Archie. Tabitha then barks an order to the still-disguised Lance, who hurries off. Just then, Brock, May, and Max have since made it to Monsu Island, stopping far enough away and behind some bushes so as not to be seen. They comment with surprise that both teams are present.
Meanwhile, Team Rocket is cowering in fear on a rocky ledge at the shore. From his aircraft, Archie holds up the orb and summons Kyogre, who appears amid a thunderstorm and a raging ocean. As Archie boasts about conquering the world and states that he intends to drown the island under the ocean. Maxie protests with genuine concern that doing so will put people on the island in danger, including members of Team Aqua. However Archie replies that he doesn't care. Shelly and the rest of Team Aqua become shocked at their leader's willingness to even sacrifice their lives. Lance, who is standing next to Maxie, removes his hood and warns Archie about the orb’s power. Archie, however, ignores him and has Kyogre continue to wreak havoc. Lance now informs Maxie that Kyogre and Groudon are about to fight, and explains the world-shaking consequences of such a conflict, as Archie laughs maniacally from his aircraft. Kyogre's disturbance causes a tremor that causes the downed Magma helicopter to shift, throwing Ash and Pikachu around. Inside, Pikachu awakens, and his body is taken over by the orb again. Pikachu uses his electricity to escape captivity and rush towards Groudon.
Brock and the others, meanwhile, are searching for Ash near the Magma chopper, when they meet up with Lance. They're happy to see each other, and Lance removes his Magma disguise completely, as it's no longer needed. Ash hears them all from inside, and he explains that Pikachu has run off. As a tsunami wave fast approaches, Team Magma and Team Aqua rush into the island ruins for safety. Lance tells Ash to back away, and he then sends out his Dragonite, who uses its Dragon Claw to make the hole large enough for Ash to get out in time. With Ash now free, Lance suggests they split up. Lance rides off on Dragonite to take care of Archie, while Ash and his friends run off to find Pikachu.
Elsewhere, Shelly is worried about Archie, and she tells the rest of the team to leave because they're all in danger. Flying in his aircraft above Kyogre, Archie is basking in his power. Lance approaches Archie and calls for him to stop. Archie responds by ordering Kyogre to attack. It fires a Hydro Pump at Lance and Dragonite, though Dragonite dodges it. Lance calls for his nearby Red Gyarados to use Hyper Beam, and Archie tells Kyogre to do the same. The beams collide, and it ends in a stalemate. Archie just laughs, proclaiming that the world is his now. Suddenly, the Red Orb he's holding absorbs into his hand, in the same way the Blue Orb did with Pikachu. Archie screams, then laughs insanely as the orb's throbbing markings appear on his chest.
Back on land, Team Rocket discuss their situation and examine Team Aqua's sub. When they confirm through an on board computer that Groudon is still contained, Meowth launches into a storybook-style fantasy about what they'd do with Groudon and Kyogre. Suddenly, a lightning bolt out of nowhere shocks Team Rocket — it's the possessed Pikachu. Ash and his friends run towards Pikachu, but he leaps on top of the metal box containing Groudon. Maxie and Tabitha arrive at the sub in time to see Pikachu channel the lightning from the storm into himself and amplify his power. James whips out a bazooka and aims it at Pikachu, but he quickly shocks them and sends them blasting off. Pikachu is still calling on the lightning, and all everyone else can do is watch. Then, the biggest lightning bolt yet comes crashing down towards Pikachu and the box, sending enough of a shock through the containment system to awaken Groudon. Archie and Kyogre watch intently as the lightning creates an explosion and Ash screams out for Pikachu. Monsu Island’s volcano erupts as Groudon's Drought Ability begins to take effect, bringing an end to the storm. Groudon then comes into full view, and Pikachu lands on his head. Kyogre roars and launches yet another tsunami, even bigger than the last one. Groudon has things under control though, as it powers up and launches a Solar Beam at the giant wave, causing it to evaporate. On land, members of both Team Aqua and Magma are beginning to understand the real power of the ancient Legendary duo. Still on Dragonite, Lance notices Pikachu on Groudon's head, and lands next to Ash and his friends. Lance warns them of the danger and says they should make a run for it. Ash says he won't leave Pikachu, and his friends agree to stay as well. They also decide that since Pikachu has sided with Groudon, they will too in a bid to combat Archie.
Out on the water, Kyogre fires a Hydro Pump at Groudon, and Max exclaims that the attack would do major damage because Groudon is a Ground-type. Groudon is unscathed as Pikachu deflects the attack with a super-powered Thunderbolt. The sun's rays are beginning to energize Groudon now. Lance tells Ash to come with him, and tells Brock and the others to take his Red Gyarados and try to stop Archie. Just as Dragonite carries Ash and Lance out over the water, Kyogre pulls Groudon underwater. Ash screams out for Pikachu, but Lance says to wait. Sure enough, they both resurface. As Kyogre's Hyper Beam collides with Groudon's Mud Shot, Brock and May go into action, sending out Mudkip and Beautifly. Their Pokémon attack Archie's mini-chopper with Water Gun and Silver Wind respectively, causing it to momentarily go out of balance. Archie notices their presence, and he sends Kyogre after them. Max calls for Gyarados to swim away. As they keep Kyogre occupied, Groudon fires a Solar Beam at it. Archie alerts Kyogre, who puts up another giant wave as a shield, but the Solar Beam bursts right through and scores a powerful hit on Kyogre, sending it flying back to land in the water again. Above, we see Archie's body rejecting the orb, which was apparently caused when Kyogre got hit. The orb emerges from Archie's body, and Archie faints and falls off his chopper, but Dragonite catches him. The same thing that happened to Archie is also now happening to Pikachu. He yells as the orb removes itself from his body. Pikachu faints as well and falls off Groudon's head, landing in the water. Ash promptly leaps off Dragonite, diving in after Pikachu. Brock tells Gyarados to go down and save them. Ash catches Pikachu underwater, then sees that Kyogre is approaching them.
Back at the shore, Lance and Dragonite have landed with Archie. Lance, Dragonite, Tabitha, and Maxie look on as Shelly worriedly tries to get Archie to wake up. He slowly comes around, but seems to have no memory of what happened while he was possessed by the orb. Just then, Ash and Pikachu emerge from the water, on Kyogre's back. Gyarados catches up to them, and Ash's friends ask if he's all right. Ash tells them that Kyogre had saved him, and then Pikachu wakes up. Ash and Pikachu have a happy reunion. Lance and Dragonite show up next to Ash, and Lance asks if he'd like a ride back to shore. Max then points out the two orbs, rising in the air and circling each other. They combine into one, and then dissipate. Groudon and Kyogre stare at each other briefly, and now that neither of them is linked to an orb, they retreat back to their respective lairs: Groudon into the volcano, and Kyogre to an ocean trench. Lance and the others discuss the day's events, and Lance says that the two legendary Pokémon will start a new world, as Ash wonders where they'll go.