Lost in a desert, Ash and his friends see lots of identical pits in the ground—Trapinch burrows! A young woman named Elisa warns them they're trespassing on hazardous territory: these burrows connect to the many caves of the Trapinch Underground Labyrinth.
Enter Hal, a Pokémon researcher and Elisa's old friend. He's being chased by a Donphan, but Elisa's Meganium clams Donphan down. It turns out that Hal once fell into a Trapinch burrow and discovered a lake in the Labyrinth—a lake where Trapinch gather and evolve into Vibrava! Now he's attached a transmitter to a Trapinch so he can find the lake again.
Team Rocket appears and seizes Pikachu with their Diglett Supreme machine. But after Brock's Ludicolo breaks it and more Trapinch chew the machine to bits, Team Rocket and Pikachu don't have a leg (or machine) to stand on, and they fall into a burrow! Ash, Elisa, and Trapinch jump in after them, followed by Hal. As Max, Brock, and May wonder what to do, they fall into the burrow themselves and meet Elisa, Ash, and Trapinch.
Trapinch wanders away just before the tunnel floods with water, sweeping Ash and his friends into the underground lake where Pikachu is already waiting. Trapinch strolls in, followed by Hal, and a happy reunion follows. Everyone watches a nearby group of Trapinch evolve into Vibrava—until Team Rocket swoops in and nets all the newly evolved Pokémon.
Brock and Elisa use Ludicolo and Meganium to free the trapped Vibrava, who then use Supersonic to deflect Team Rocket's attacks. Pikachu sends Team Rocket blasting off, the Vibrava fly everyone back to the surface, and all's well again as Ash and his friends head for the next town!
Ash and his friends find themselves lost on their way to Cerosi Town, since they are out of PokéNav range and Brock can't find an appropriate map. Ash speculates there might be something in the nearby craters and throws a rock into the nearest one. A strange orange head pops out and swallows it. Ash consults the Pokédex, which identifies it as a Trapinch, a burrowing desert Pokémon with powerful jaws capable of eating sand and rock. The group realizes that the craters are made by Trapinch.
Not long after, Elisa, a local ranger, comes in her car and tells the crew that they are trespassing in a dangerous area. While Max restrains Brock, May explains that they didn't know the area was restricted. Shortly after commenting that the region doesn't look dangerous, Ash loses his footing and falls in a crater. Elisa saves him by throwing a rope. She explains to the group that there is an underground tunnel network known as the Trapinch underground labyrinth linking all of the craters, and that they should do everything possible to avoid falling in.
Elisa starts to drive the group to safety, but they soon encounter a strange man running from a charging Donphan. Elisa calls out her Meganium, which releases a scent from its petals, calming the Donphan. After the unknown man thanks Elisa for saving him again, Elisa introduces him as Hal, an accident-prone researcher. Hal explains that he is looking for a Trapinch with a transmitter on its back, which he's using to search for a secret underground lake in the Trapinch labyrinth. Hal tells them the story from his youth, claiming that he discovered the lake when he was lost in the labyrinth himself. While trying to find a way out of the maze, he lost consciousness. When Hal woke up he saw a huge, beautiful lake with many Trapinch gathered around it. All of the Trapinch evolved into Vibrava at the same time before leaving. Without explanation, Hal suddenly found himself back outside of the labyrinth. This motivated him to start his career as a Pokémon Researcher. The group spots the transmitter-laden Trapinch heading into a crater.
Meanwhile, Team Rocket watches the group from underground and decide to steal Pikachu. They plan to surprise the group from underneath with their Diglett machine and grab Pikachu (and they execute this part of the plan quite successfully). Ash tells Pikachu to use Thunderbolt, but the Team Rocket machine is insulated against electrical attack. Brock calls out his Ludicolo and orders it to use Water Gun. The force of the attack forces the Diglett into one of the craters and many Trapinch start biting it, quickly reducing it to scrap metal. Team Rocket and Pikachu fall through the mud at the bottom of the hole. Ash goes to save Pikachu, and Elisa goes with him, with The transmitter Trapinch not far behind. Team Rocket, Ash's Pikachu, Ash with Elisa and Trapinch, all fall to different parts of the labyrinth. The rest of the group and Hal use the Trapinch's transmitter to track them. Ash doesn't want to leave the labyrinth without Pikachu, so he and Elisa follow the transmitter Trapinch.
Elsewhere, Team Rocket encounters a Trapinch and they decide to catch it for Giovanni. Meowth thinks that the Trapinch could crack walnuts for him. While they think about it, Trapinch saunters away, but Team Rocket spots Hal and decide to follow him. Meanwhile, Max, May, and Brock fall just in front of Ash and Elisa. Soon after, water from an unknown source begins to flood the tunnel. The group flees and ends up in a lake that Hal was talking about with Pikachu. The transmitter Trapinch and Hal arrive soon thereafter. Many Trapinch, including the transmitter one, assemble around the lakeside and evolve. As the Vibrava fly off, Team Rocket makes their next greedy move and captures them in a large balloon-based net. Brock calls out his Ludicolo, and Elisa calls her Meganium. Ludicolo uses Bullet Seed and Meganium uses Razor Leaf to set the Vibrava free. Jessie tells her Dustox to use Poison Sting and James tells his Cacnea to use Pin Missile. The Vibrava defend the group with Supersonic. With a burst from Pikachu, Team Rocket blasts off again, and the Vibrava airlift the group out of the deep cavern. Hal resolves to keep the underground lake a secret, revealing he only wanted to find it so Elisa would believe his story.