Ash, Misty, and Tracey are walking through a mountainous desert region. Tired and hungry, Ash offers to eat if his companions are tired and hungry too. Tracey then calls to Ash and Misty to see what he is seeing. They run up to Tracey, and they discover that they have come upon the city of Trovitopolis, the largest city on Mandarin Island South. Jessie, James, and Meowth spy on Ash and his friends, having just completed a large trap in which they plan to detonate underground dynamite to trap Pikachu. Meowth prepares to activate a trap button, but it turns out that the dynamite was beneath them the whole time. The trio falls into a deep sewer, but the explosion also collapses the ground beneath Ash and his friends, just as planned.
The group is woken up by Pikachu and Togepi, and they start to walk down the cave. As they do, the ringing of a bell is heard somewhere. Then, a Vine Whip comes from the water and taps on Ash's shoulder. Ash thinks that it was Pikachu and begs him to stop, though Pikachu isn't on Ash's shoulder, but on the ground in front of him. Another vine appears and the group sees this. Ash commands Pikachu to use Thunder Shock, but Misty states that if Pikachu uses an Electric attack, everyone will be shocked, so Ash sends out Bulbasaur. He tells it to use Razor Leaf, but the creature hits the leaves away before grabbing Bulbasaur and pulling it into the water. Ash attempts to jump in after it, but Misty, Tracey, and Pikachu hold him back. Tracey points out that he will be dragged down too, but Ash does not care and still attempts to jump in to save him. As they struggle for a while, Officer Jenny arrives from up above. Jenny explains that the sewers are very dangerous and throws a rope down to them. Ash refuses, wanting to find Bulbasaur, so Misty and Tracey tie him up and Jenny then hoists him to the surface.
Ash and his friends are thrown in jail, but Jenny releases them early. A man identified as the Mayor of Trovitopolis initially protests this, but is forced to acquiesce because it is the law. However, he orders the group not to say anything about the creature. When Ash tells the Mayor that he wants to get Bulbasaur back, the Mayor loses his temper and threatens to have them all arrested for endangering public safety. Jenny reveals to them that they are not the first people to have seen the creature. She then reveals that the police force has had a number of reported encounters with a mysterious creature in the sewers, but no serious injuries were reported. She then tells them that the Mayor says people will panic if word gets out about the creature, because they will never be able to capture it due to there being almost 500 miles of sewer underneath the city, and over 5,000 manholes.
The Mayor then says that it is why they have taken drastic and immediate action to ensure the safety of everyone in the city. He also says that there is an election next week, and if word gets out that he is letting a monster roam the sewers, then he won't stand a chance. Nurse Joy comes in and tells him that she has heard what he intends to do about the sewer creature problem. The Mayor tells her that it is his business, and the group asks Nurse Joy about his plan. She tells them that instead of capturing the creature so it can be studied, the Mayor intends to send a SWAT team down to the sewers to destroy it. Ash, Misty, and Tracey respond by saying the Mayor's plan is cruel and that it could be a whole new species of Pokémon. The Mayor says that any talk of any such plan is pure speculation, and that there is no evidence. Jenny tells him that such a plan is illegal and the police force does not know anything about it. The Mayor loses his temper again, proclaiming that he is responsible for the city and he will do what he sees fit for the city.
At the Pokémon Center, the group speaks to Professor Oak about the new species. Ash asks Oak what they should do, and Oak says that there has to be some way of preventing the Mayor from destroying the creature. Nurse Joy does not think so, because the only thing the Mayor cares about is being reelected, and he is not going to let anything get in his way. The group see dozens of campaign posters all over building walls and park fences, as well as a statue of the Mayor. Ash then decides to return to the sewers to search for Bulbasaur. Upon arrival, the group finds that the Mayor is briefing his SWAT team inside the sewer, but Ash knows how to find an entrance, since Nurse Joy gave them another entrance to the sewer on the other side of the city.
Meanwhile, Team Rocket is still trapped in the sewers. They hear the same bell-ringing sound, and the creature reappears and starts rubbing Meowth's chin. Meowth mistakenly thinks that Jessie or James rubbed him, but he finds that it wasn't them. The creature appears and Team Rocket flees in panic. After getting to a safe distance, they hear footsteps, and a flashlight is pointed at them. James sends out his Weezing and commands it to use Smokescreen; it engulfs the sewer with smoke. Team Rocket then makes their getaway, screaming in fear. It turns out that Ash was holding the flashlight and Misty and Tracey are there too. Ash asks if everyone is alright, then Misty notices that Togepi is missing. When they spot Togepi at the end of the path, Misty picks it up; but the creature suddenly appears, grabs Togepi, and pulls it and Misty underwater. Ash promptly sends out Muk, which he asked Professor Oak to send to him.
Meanwhile, Team Rocket comes across the Mayor's SWAT team, who mistakes them for the creature. The squad leader radios this to the Mayor, who commands them to attack immediately. The team opens fire at the trio with putty guns, forcing them to flee again. Elsewhere, Ash, Tracey, and Muk come to a dead end. Muk points out that they have to go into the underwater tunnel to find Misty, Togepi and Bulbasaur. Ash and Tracey jump in, swim down the tunnel, and eventually reach the end, where the creature appears and attacks them.
Meanwhile, the SWAT team emerges from the sewer and reports to the Mayor that beyond Team Rocket, they couldn't find a creature that matched the original description. The squad leader then comes to the conclusion that the sewer could be infested with multiple unidentified creatures. The Mayor grows increasingly paranoid and orders that every manhole to the sewer be sealed off.
Elsewhere, the group wakes up and sees an opening into the city. They also see Misty and Bulbasaur. Tracey finds the creature, who actually is a giant Bulbasaur that has been living down there for a long time and was actually using Vine Whip. Ash notices that it has the Mayor's symbol on its collar.
Back at the Mayor's office in City Hall, Nurse Joy explains to him that Ash and his friends are in the sewers and they will be trapped there if all of the exits are sealed. The Mayor assures Joy that he will remove all of the concrete as soon as the election is over. Later, while the Mayor is taking a bath, an earthquake starts, and water forcefully erupts from the floor right under the Mayor's bathtub. The bathroom, the City Hall, and the entire town are flooded. The group emerges with the giant Bulbasaur, and Ash asks if it looked familiar to the Mayor. He sees his trademark "M" initial on Bulbasaur's collar and explains that he abandoned his Bulbasaur in the sewer as a child because it wouldn't evolve. Upon learning this, the Mayor's Bulbasaur grabs him with Vine Whip. Misty and Tracey accuse him of abandoning it despite its love for him, whilst many townspeople see the Mayor half-naked, leaving him embarrassed. Misty orders him to apologize to his Pokémon for what he did, but he refuses.
The SWAT team arrives, and the Mayor orders them to open fire on Bulbasaur. However, Ash steps in and commands Pikachu and Bulbasaur to use Thunderbolt and Vine Whip, respectively, on them; this sends the SWAT team flying off. The Mayor then says that he will offer a truce with his Bulbasaur, but Bulbasaur spins him around and throws him into his statue, toppling it and his chances in the election next week. Later, Officer Jenny thanks Ash and his friends for their help, and Nurse Joy says that she will take care of the giant Bulbasaur at the Pokémon Center. When Ash asks where Trovita Island is, Joy points it out, but it is almost far away. Officer Jenny, however, agrees to take them to a ferry that heads there.
Meanwhile, Team Rocket finds an exit from the sewer system, but it has bars on it and they realize they are trapped. Jessie sneezes and breaks the metal bars, setting them free.