On the way to Mahogany Town, Ash and his friends find themselves lost in a heavy fog. Ash continues ahead only to slip down a ledge. Brock also steps off a ledge. As Brock lays injured a mysterious girl comes out of the mist, accompanied by a Ninetales. When he asks the "vision of beauty" what she's called, she introduces herself as Lokoko. After being informed that they can wait out the fog at her house, they are invited to follow. Lovestruck, Brock immediately accepts her offer, Ash and Misty follow behind. Nearby, Jessie, James, Meowth and Wobbuffet notice Lokoko leading the twerps away. They decide to follow them and steal both Ninetales and Pikachu.
Lokoko leads Ash and his friends into her gigantic mansion. She invites them to the mansion's dining area and serves them a platter of fruit. Brock begins flirting with her and to Misty's surprise Lokoko begins flirting back. As she looks around the room she suddenly notices that Lokoko leaves no reflection in the cabinet mirror. When she points it out to Lokoko, the doors to the cabinet suddenly slam shut as if pushed by an invisible hand. Misty becomes frightened and tries to convince Brock to leave with her and Ash, but Brock refuses to listen. She tries to open the cabinet shutters again, but Lokoko returns. Misty asks Lokoko if she's the only one living in this mansion, which causes Lokoko to tell her the mansion's story. The mansion was originally owned by a man, the original Trainer of Ninetales. However, he left on a long journey and has yet to return. The other servants in the mansion eventually left for other places, leaving Lokoko and Ninetales as the only inhabitants of the mansion. Touched by her story, Brock offers to stay with Lokoko forever. To everybody's shock Lokoko accepts his offer and agrees to marry him. Brock runs towards Lokoko to hug her and to both Ash and Misty's terror, he falls right through her body. Brock doesn't seem to notice this and Misty realizes that he's been put into a daze. Along with Ash, she tries to knock some sense into him, but all it does is make him angry. Lokoko tells Brock to wait outside for her and after he's left she turns her attention to Ash and Misty. Angrily she tells them that if they want to leave so badly, then they can go without Brock. Using a strange power, Ninetales levitates both Ash and Misty off the ground and throws them out of the mansion.
Meanwhile, Team Rocket succeeds in sneaking into the mansion. They decide to put off capturing Pokémon for a bit and instead look for something to eat. Exploring some of the mansions storehouses, they find that the first room they explore is filled with treasure- an entire room filled with delicious cookies. Later, the trio travels to a second room and thrilled to be surrounded by a sea of popcorn.
Fearful for Brock's safety, Ash and Misty spy on Brock and watch as his clothes suddenly change. They quickly sneak back into the mansion and begin exploring. They soon find a room that used to belong to the owner. Hanging above the desk is a portrait of the owner, who looks almost exactly like Brock. The desk also has two objects on it, Ninetales's Poké Ball which appears to be an incredibly old model with intricate details and the owner's diary. Paging through the diary for clues, they learn that there was once a man who owned this mansion who left and never returned and to their horror, they discover that the last entry was made over 200 years ago. They conclude that if Lokoko has been waiting for the owner for 200 years, then she must be a ghost. They rush outside to confront Brock. Ash calls out Totodile and orders it to attack Ninetales with Water Gun. Though the attack misses Ninetales, it hits Lokoko and passes right through her, causing Brock to see her for what she actually is. The spell over him breaks and Brock returns to normal. Furthermore, the mansion itself begins to decay, revealing that its grand appearance was just an illusion over a long-abandoned ruin. Team Rocket, who is still chowing in the storehouse suddenly realizes that all they've been eating were tree leaves, which were disguised as food by Ninetales's power.
Ash and his friends race through the mansion, pursued by Ninetales. It eventually corners them in the owner's study, and Brock spots the owner’s portrait on the wall. Ash and Misty explain briefly, but Ninetales enters into a rage and makes Lokoko appear again. Ash tries to battle it with Totodile and Pikachu, but Ninetales easily immobilizes them using its telekinesis. Noticing the Poké Ball on the table, Brock picks it up and orders Ninetales to return. Confusing Brock for its owner, Ninetales happily jumps into the ball. Lokoko reappears and reveals that she is an illusion created by Ninetales, much to Brock's disappointment. As she begins to tell the real story behind the mansion, Brock calls out Ninetales, hoping that the truth will help calm it down. Lokoko tells them the real story of the mansion. Over 200 years ago, the owner of the mansion left on a journey. Though he promised he'd be back in a month, he never returned. Over time the servants who worked in the mansion began to leave, each sadly bidding Ninetales farewell until it was eventually left alone. Though Ninetales waited patiently, losing track of time, it came to realize that a century had passed; it knew its owner could not possibly still be alive. It tried to leave the mansion but found that it was bound by some sort of power around its Poké Ball. Trapped in the mansion, it continued to wait, its power growing stronger and stronger as time passed on. Over two hundred years after its master had left, Ninetales sensed Brock's presence. Since Brock looked almost exactly like its late owner, Ninetales decided to lure him to the mansion and trap him, so Brock could take over as Ninetales's new Trainer.
Suddenly, Team Rocket appears and captures Ninetales in a net. Angry over being tricked into eating leaves, they've decided to capture Ninetales and deliver it to their boss. Arbok and Victreebel are sent out, with Victreebel latching onto James. Ash has Bayleef's Razor Leaf cut the net open. A Poison Sting from Arbok is sent back at the Team Rocket balloon by Ninetales's telekinesis. After freeing himself, James throws Victreebel down to attack Brock. Ninetales knocks Brock down in time, but the fall also causes the old Poké Ball to hit the ground and shatter. Bayleef uses Tackle to send Arbok and Victreebel back to the balloon. Ninetales and Pikachu send Team Rocket blasting off with a Flamethrower and Thunderbolt combo.
With the old Poké Ball now shattered, Ninetales is released from the spell that trapped it in the mansion. Finally free, Ninetales goes off to explore the world. As Ash and his friends prepare to continue their journey, they are met one last time by Lokoko, who thanks them for helping Ninetales before disappearing.