Ash and his friends are riding a cable car to what they think is Bluefinland, where they want to take a ferry to Yellow Rock Isle. The overhead announcement reveals that the cable car is actually stopping at another town called Blue Lagoon. Brock states that if they miss the next ferry, they'll have to wait another three days for another one, but Ash assures his friends that he'll think of a solution. Suddenly, a Chinchou appears in front of them, and a curious Ash pulls out Dexter for extra information. Misty is instantly keen to add a new Water Pokémon to her team and tosses a Poké Ball at it, but the Poké Ball bounces off the Chinchou. A boy's voice is heard, yelling the name "Bright"; the boy gets to the Chinchou, but it hops away. Ash goes around and cuts the Chinchou off, but it ends up using Spark on Ash. The boy demand Chinchou apologize, but Ash admits that he shouldn't have grabbed one of its antennae. The boy introduces himself as Dayton and is thrilled to meet the group of Trainers. Ash informs him that they are hoping to reach Bluefinland, and Dayton replies that he is going there for the Parade of the Chinchou. Ash is pleasantly surprised and asks if Bright will be leading them there, only to receive a powerful Spark attack in return. Team Rocket, spies on the group, and Jessie is keen to steal the Chinchou for herself.
Ash gives Professor Oak a call from Blue Lagoon's Pokémon Center. He asks the Professor why the Chinchou, a sea dwelling Pokémon, is up in the mountains. Oak explains that the Whirl Islands were once part of the seafloor, but geological forces led them to rise out of the sea as the islands of today. He reveals that the Blue Lagoon is an ancient breeding ground for the Chinchou, and that every year the Chinchou make their way up the mountain to lay their Eggs and later return to the ocean. Dayton says that the Parade of the Chinchou is a festival that commemorates the Chinchou's return to the ocean. He then informs the group that he and his father will be leading this year's parade. Dayton later asks his father if Ash and his friends can join the parade. Daizō happily agrees to have the extra help.
The Parade of the Chinchou soon begins. Daizō blows on a whistle and the lake begins to glow, with the glow getting closer and closer. The gathered crowd wait anxiously and beating drums make for a festive atmosphere. Bright flashes its antennae at the lagoon and the other Chinchou emerge from the waters to begin their procession to the ocean. Dayton and Bright take the front, while Daizō will manage the Chinchou from behind. The Blue Lagoon crowd waves to the migrating Chinchou and splashes them with water to keep them from drying out. The procession suddenly stops at a rope bridge, but with some encouragement the Chinchou make the crossing. Ash, Dayton and some of the Chinchou reach the other side and notice a tall watch tower ahead. Team Rocket reveal themselves and perform their motto. Meowth gets out a device and presses the button on it, but nothing happens. Brock, Misty, Daizō, and half of the Chinchou seize this opportunity to run across back to the other side just as Meowth finally fires a missile. The missile drapes its net over the entire bridge and pulls it out of the ground. The overwhelming weight leads the missile and the bridge to plummet into the river below. Team Rocket are set on catching the Chinchou, but Bright delivers a paralyzing Thunder Wave and Pikachu blasts the trio off with a Thunderbolt.
Seeing that there is no way to get across the river, the two parties decide to split up. After a while, Bright gets tired and stops, as do all of the other Chinchou. Dayton suggests that they should get some water; Ash sends out Totodile and orders it to use Water Gun as a rain effect. It energizes all of the Chinchou, after which they come across a mountain pass as the night passes on. Dayton steps on a loose rock and falls into the valley below. Sometime later, Dayton wakes up at the bottom, feeling lost as there is no other way back up. His leg appears bruised, and the sudden rainfall makes for a miserable wait for help. Ash searches for Dayton, but Bright senses something and makes its way down a path into the valley. Dayton starts to hear Bright and sees the light they produce, whereupon he meets up with Ash.
They walk through the forest again. Despite the dense morning fog, they finally arrive at the beach, where Brock, Misty, and the others are already there. The Chinchou start to run towards each other, but as soon as they meet up, they get caught in a pitfall. When the dust clears, it is revealed that Team Rocket is in their balloon, and has caught the Chinchou. James sends out Weezing and it uses Smokescreen, creating a thick cover for their escape. Pikachu tries using Thunder Shock but misses. Dayton calls for Bright to shine its light so they can see them. The Chinchou start to glow and the light seeps through the smoke. Ash sends out Bayleef and Totodile. Totodile makes a hole in the smoke with Water Gun, followed by Bayleef using Razor Leaf to cut the cages, but to no avail. Dayton then yells to the Chinchou to use Thunder Wave; this succeeds in breaking the cage, and the Chinchou land in the ocean. Pikachu follows up with a Thunderbolt, and Chinchou add an amplified Spark to the attack, sending Team Rocket blasting off.
Bright returns to Dayton at the shore, not wanting to leave just yet. Dayton tells Bright he will be alright, just as a wave sweeps up Bright. Dayton wishes his friend all the best as the Chinchou's reflected yellow glow fades into the distance. Meanwhile, Team Rocket float in the ocean, waiting for something to help them. They see a bunch of yellowish bulbs and think a rescue has come. When they jump on them, the Chinchou shocks them again. Later, Ash and his friends arrive in Bluefinland. The group catches a ferry to Yellow Rock Isle, saying their goodbyes to Dayton and Daizō while doing so. At the last minute, on a wave barrier, a lone Corsola sits. Misty almost dives towards it, but Ash and Brock restrain her from jumping off.