After stopping off at Mandarin Island, Ash and his friends overhear a commotion and notice a Grimer, Voltorb, and four Magnemite attacking their Trainers. The group runs to help, but as Pikachu approaches, he stops. When Ash asks what is wrong, Pikachu just glares at him. Out of nowhere, Togepi jumps out of Misty's arms and glares at its Trainer as well. Pikachu and Togepi then join the other Pokémon, while Voltorb explodes, distracting Ash from rescuing his Pokémon. When the dust clears, Officer Jenny has arrived, but the Pokémon are gone. At the police headquarters, Jenny explains that for some time, Pokémon have all been disobeying their masters. The only Pokémon that doesn't appear to be affected by it is a Gastly. Jenny explains that she is hoping to figure out what is going on using Gastly. Ash and the others vow to help as well.
Meanwhile, Team Rocket has arrived on the island. While Jessie and James want to go exploring, Meowth becomes angry with them, saying they have important business to do. Suddenly, Meowth pauses, and when Jessie and James ask him what is wrong, he takes off. Team Rocket follows Meowth and ends up in a large room. As they get up, they notice Butch and Cassidy looking at them. After both duos say their motto, Butch and Cassidy explain that they are stealing all of the Pokémon on Mandarin Island for the Boss. They present proof by showing all the Pokémon they have stolen so far, which includes Pikachu, Togepi, and Meowth. Impressed, Jessie and James decide to steal the Pokémon Butch and Cassidy have taken.
Jessie sends out Arbok and Lickitung, while James sends out Weezing and Victreebel. Butch snaps his fingers, and a Drowzee hooked up to a machine appears. As Jessie and James question about it, the Psychic-type begins using Hypnosis, causing all four Pokémon to turn against them. Butch and Cassidy explain that they have Drowzee hooked up to an antenna that strengthens and broadcasts its hypnotic power all across Mandarin Island, which has allowed them to take control of all of the resident Pokémon. Having revealed their plan, they decide to get rid of Jessie and James and set their own Pokémon, including Meowth, on them.
Jessie and James are later found unconscious and taken to the Pokémon Center. When they awaken, they find themselves with Officer Jenny, Ash, and the others. After they identify Butch and Cassidy as the crooks, Ash tries to convince them to infiltrate their base again. The duo refuses until Jenny convinces them that if they do this, they will be thought of as heroes.
Jessie and James later approach Butch and Cassidy with a large cart filled with Poké Balls, claiming that they would like to make peace and have brought hundreds of Pokémon for them. Butch and Cassidy are skeptical, but let the duo in anyway. As they enter, Ash, Misty, and Tracey jump out and demand that Butch and Cassidy return the Pokémon. They refuse, saying that with the help of Drowzee, the Pokémon on Mandarin Island will do whatever they want them to do. Using Drowzee, they have all of the Pokémon attack the Trainers. All of the Electric, Fire, and Water types combine their attacks into a super-powered blast, but Gastly protects them from it.
Suddenly, Ash gets an idea. After Pikachu shocks him, he gets up, taunting Pikachu into launching another attack. This angers Pikachu, who tries again. Ash keeps dodging the attacks, all the while taunting Pikachu. As Gastly starts to weaken, Ash gets in front of the machine controlling Drowzee and taunts Pikachu yet again. Pikachu launches a massive Thunder Shock, which strikes not only Ash, but the machine as well. As a result, it overloads and explodes, causing Drowzee to lose control of all of the Pokémon.
As Ash and Misty are reunited with Pikachu and Togepi, the other Pokémon are released back onto the island, and run off to find their Trainers. However, Butch and Cassidy refuse to let Ash and the others leave. They challenge them to a battle, and Ash accepts. Using Drowzee, Butch and Cassidy are able to keep Pikachu at bay as well as Jessie and James's Pokémon. They then decide to use the building's antennae to project Drowzee's Hypnosis and retake control of all the Pokémon on the island. As the Psychic-type begins using Metronome, Tracey comments that they don't know what move it will use. At the same time, nobody notices Togepi using Metronome as well. When it completes the move, an explosion sends Butch, Cassidy, and Drowzee flying, and their headquarters is destroyed.
After the duo is arrested, everyone wonders where the explosion came from. Many attribute it to Drowzee's Metronome having backfired on itself. Ash and his friends then depart from Mandarin Island.