Darkrai first appears disguised as Cresselia in the player's dreams, telling them that they are causing a distortion in the fabric of space that could plunge the world into darkness and never endingnightmares. He tells them this is because they came from the future and thus shouldn't exist in this place and time. When Azurill falls into a never ending nightmare, Wigglytuff's Guild has the player and partner go to find a reformed Drowzee to send them into the young Pokémon's nightmare to find out what's wrong. There, they encounter Cresselia, who tells them the same as the player was told in the dreams as well as blaming them for Azurill's nightmare and tries to destroy them but is interrupted by Drowzee and flees.
The partner is discovered to be having similar dreams, only being told it was because they'd been to the future and came back that's causing the distortion. Now very confused and upset, they decide to go see Palkia for an explanation. However, before they can do so, Palkia arrives in their base and takes them to its domain, the Spacial Rift. He then attempts to destroy them, claiming they're distorting the fabric of space. The two manage to defeat it in battle, however, it then becomes trapped in a nightmare. Cresselia then takes them into Palkia's nightmare where he tries to destroy them using Palkia, who he told the team was purposely distorting space. Before Palkia can finish them off, a second Cresselia arrives and exposes the first "Cresselia" to be Darkrai, who she'd been pursuing for a long time. Darkrai then tells them that he was the one distorting space. Darkrai escapes but offers them the chance to stop him at Dark Crater.
Cresselia reveals to the team it was Darkrai who was behind the near destruction of Temporal Tower and the dark future the player came from. He was seeking to make a dark world that he could rule as his own. Although the player and their partner do cause a distortion, it is not large enough to be a threat on its own. Darkrai wanted to try to destroy the team because they stopped his last plan and stood in his way. She is concerned that Darkrai's challenge may be a trap, as he normally flees when confronted, but the group decides to travel to Dark Crater with Cresselia to stop him.
At the bottom of Dark Crater, they confront Darkrai, who reveals it was him that caused the player's memory loss and transformation into a Pokémon, by attacking him and Grovyle in the time stream. Despite this, the team prepares to battle Darkrai but he offers them the chance to join him and rule the world. It appears the partner takes it, having given up all hope of defeating Darkrai. However, when the player realizes how uncharacteristic the partner's actions are, they attack Darkrai, revealing it was a nightmare induced by Darkrai. Darkrai summons a group of Pokémon to assist him in eliminating the group but it proves to be useless.
Following their victory over Darkrai and his followers, Cresselia moves in on the defeated Darkrai to finish him off but Darkrai tries to escape through a Dimensional Hole. Though he is unsure of where, or even when, it will take him, Darkrai is confident that he'll be able to complete his plan in another place and time. Right before Darkrai can enter the Dimensional Hole, Palkia arrives to end Darkrai's meddling once and for all. Tired of Darkrai's threats to the fabric of space, Palkia attacks the Dimensional Hole right after Darkrai enters it, shattering it.
Darkrai is not killed but like the player, has his memory erased and is moved to somewhere else in the world. With his thoughts of world domination erased by this, Darkrai is left to wander the world. He can be encountered in several places after this, similar to other Pokémon players can find in a dungeon. He can be recruited after this.
Darkrai is a dangerous and cunning foe, preferring mind games and deception using his nightmare powers to outright battle. He also showed a great deal of planning, even preparing an escape route in the event the group defeated him in the final battle. He appears to be somewhat cowardly, as Cresselia says he normally flees if he's confronted and when finally confronted for the final showdown, he summons his minions to assist him instead of fighting them alone. He is evil and has dreams of world domination, not caring if he has to destroy all of space and time if he must, so long as he gets a dark world to rule in the end. After his memory is erased by Palkia, he is reformed into a good and noble being, due to his evil personality being erased in the process, giving him a second chance at life.