After winning the Fog Badge, Ash and his friends are taking a snack break in Ecruteak City. Ash is keen to get to the next Gym, and Brock informs him that he has two options at equal distance, Olivine City or Mahogany Town. While Ash considers which one, Misty spots a poster for a tea ceremony and declares that she wants to do some sightseeing first. As the group are about to leave, a lost Eevee walks by. Just as Misty hugs the Eevee, its Trainer, a girl named Sakura turns a corner and retrieves her Pokemon. Misty introduces herself and her friends to Sakura, before asking if she knows about the tea ceremony. Sakura giggles before admitting her sisters are the hosts of the tea ceremony.
Sakura escorts everyone to the tea house, and she gets dressed in her traditional kimono before leaving the group to explore the grounds. The group soon meet the other Kimono Girls while they are busy hosting guests, and Brock is lovestruck and compliments all four sisters. The group joins Satsuki for a traditional tea ceremony. Sakura soon joins them and officially introduces the group to her older sister Satsuki. The other three sisters, Sumomo, Tamao and Koume appear, much to Brock's dismay as they notice Brock who has complimented all four of them. Sumomo asks the gang if they have heard of the four beautiful Tea Ceremony Sisters. Sakura isn't happy to hear this, but Koume tells Sakura she is a sister, but she isn't beautiful. The gang realize that Sakura has the same problems that Misty has with her sisters, both of them are the youngest and their sisters focus on themselves. This leads Sakura to make friends with Misty.
Meanwhile, Team Rocket are partaking in a tea ceremony, but Jessie complains that it is dull and slow. James and Meowth turn to Jessie for guidance on how to behave, but she seems unsure of herself. Jessie abruptly shouts "Tea Time!" before she quickly slurps down her tea. However, the Rocket trio are unimpressed by tea's taste and voice their opinions. The trio then eat their tea cakes, but complain that it wasn't filling enough. As the host woman explains that a tea ceremony is about observing tradition, Jessie walks over to the box full of tea cakes and promptly begins eating them all. A security guard tries to restrain Jessie, but she ends up tossing him into the boiling pot of water. The resulting cries alert Ash’s group and the Kimono Sisters to the commotion.
Sakura confronts the trio as they continue to scoff down the tea cakes. Team Rocket launches into their motto, during which they remove their formal wear to reveal their uniforms underneath. Jessie calls her Arbok out while Sakura and her sisters summon out their Eevee, Flareon, Umbreon, Vaporeon and Jolteon. Happily, Team Rocket decides to steal them. Sakura orders a Tackle, but Eevee is struck by Arbok’s Headbutt. Eevee tries a Sand-Attack, but Arbok merely turns around to avoid the kicked up dirt. Jessie orders a Wrap attack, and Arbok soon strangle holds Eevee with its tail before tossing it to the ground. Sakura calls for her sisters to act, but they remain on standby. Misty and Ash send out their Poliwhirl and Totodile respectively, while James calls on his Weezing's assistance. Weezing’s Smog is countered by a Bubble attack from Poliwhirl. Both Pokémon use Water Gun, and deluge sends Weezing and the rest of Team Rocket blasting off.
Later, Misty and Sakura sit by a lake to discuss their sisters and Misty's travels. Sakura admits that she wishes to compete in the Johto League and she asks if she can join Misty and her friends on their journey. Ash and Brock return from the shops with medicinal supplies, and Misty informs them that Sakura wishes to join the group. The boys happily agree to the idea. Sakura admits she’ll need her sister's say so and then informs the group of an upcoming dance performance the following afternoon, and asks if they would be able to attend. Misty agrees, and the dance performance arrives, in which the Kimono sisters and Sakura perform a traditional dance with umbrellas. Afterwards, Sakura pleads with her sisters to allow her to leave Ecruteak City and joins Ash’s group on their travels. The sisters are quick to point out that Sakura has barely learned the tea ceremony. Ash and the others promise to take good care of Sakura. The sisters consider the possibility, noting that Ash and Misty did get rid of Team Rocket the other day. The sisters then propose that they will allow Sakura to go, only if Misty and her friends can defeat them in a Pokémon battle. Ash is confident and gladly accepts the match.
Outside, Satsuki announces the conditions, three one-on-one battles. Sumomo calls out her Vaporeon, and as Ash is about to accept the challenge, Misty cuts in front of him and sends outs her Poliwhirl, making it a Water Pokémon battle. The two Pokémon use Tackle and collide into each other. Vaporeon follows up with Sand Attack, but Poliwhirl evades and Double Slaps its opponent. Sumomo orders a Quick Attack, and Vaporeon swiftly knocks Poliwhirl into the nearby river. Poliwhirl and Vaporeon’s Water Gun attacks prove to be an even match. Vaporeon strikes back with Aurora Beam, knocking out Poliwhirl for the win.
Just as Jolteon and Pikachu begin their match, Team Rocket makes a comeback to steal their Pokémon again, this time with a specific cage for each of the Kimono girls' Pokémon. Sakura's Eevee battles James's Victreebel, but again Eevee loses and is put in the cage. Next, Ash sends Chikorita to battle Victreebel, while Misty sends out Staryu against Arbok. Staryu uses its Tackle attack on Arbok, which hits James into one of the cages. Another Tackle and Arbok is also locked up. Chikorita uses Vine Whip towards Victreebel, tossing it towards Jessie and trapping both of them in one cage. Meowth is the last free agent, but he is intimidated by Staryu and Chikorita, so he decides to lock himself in the last remaining cage. Tamao uses her Umbreon's Agility to save Eevee. Both Misty and Sumomo's Staryu and Vaporeon use Water Gun to spray the trapped Team Rocket and their balloon, sending them blasting off again.
The match between Jolteon and Pikachu resumes. Jolteon uses Thunder Wave to protect itself from Pikachu's Electric attacks. Though a Tackle takes Jolteon by surprise, and Pikachu wins the round with a detonating Thunder attack. The sisters and Ash's group are now tied, so the third round will decide Sakura's fate. Just as Tamao is about to battle, Sakura changes her mind and decides that she will stay. She tells them that she is not yet ready to go on a journey because she wishes to get stronger and travel on her own. Satsuki is pleasantly surprised and tells Sakura that her decision is a hallmark sign that she is already becoming stronger on her own. Sakura reaffirms her decision, and asks her sisters if they would help with her training. Satsuki happily agrees, followed by the other sisters.
Ash and his friends stand at a fork in the road, one way leads to Olivine City and the other goes towards Mahogany Town. Brock reads his guidebook and reveals that Olivine City has a beach, and with that the group decide to travel to Olivine instead. Sakura hopes that she will go there one day, and the others wish the same. The group says goodbye to Sakura and wave as they leave for Olivine City.