With the Silver Conference and Johto behind them, Ash, Misty, and Brock are heading towards Pallet Town when they decide to make a stop in Viridian City. There, Ash deposits his Poké Balls at the local Pokémon Center, and asks Nurse Joy if she remembers him. However, she reveals that she is the Center's new Nurse Joy, but has heard about him though. She then tells Misty that she received an urgent call from Cerulean City.
Getting to a phone, Misty finds out the call is from her sisters, who are going on an around-the-world trip. As a result, they need Misty to take over the Gym while they are away. Misty objects to this, but Ash assures her that it is only temporary. Nurse Joy then surprises Misty with her bike, which had been fixed by the previous Nurse Joy. Seeing the bike causes Misty to remember how her journey with Ash began, when he stole the bike and ended up destroying it. Ash comments on the good job Nurse Joy did with the restoration, and comments that Misty can get back to Cerulean City even quicker, but this upsets Misty and she runs out. When Ash is confused by Misty's reaction, Brock points out that Misty may have expected to continue traveling with them.
Misty wanders around the streets of Viridian City, and comments on how Ash doesn't seem to understand or care that the trio will be splitting up. She is then confronted by three Trainers, who ask her if her friends abandoned her, angering Misty even further. When Misty asks who they are, the three introduce themselves as Viridian City's top Trainers: Kim, Kail, and Kai, the Invincible Pokémon Brothers. Undaunted, Misty mocks them by word play on "invincible" with "invisible", telling them to disappear. The leader Kim continues to irritate Misty, who then challenges them to a Pokémon battle.
In a nearby field, Misty and Kim prepare to battle one-on-one. Misty sends out her Politoed and Kim his Hitmonchan. Misty orders a Water Gun, and Politoed is easily able to knock Hitmonchan to the ground. Misty mocks them into changing their names, which then provokes Kail and Kai to send out their Pokémon, Hitmonlee and Hitmontop. The three Fighting-type Pokémon surround Politoed, and Misty accuses them of cheating, stating she can't battle fairly three-on-one. However, Ash and Brock arrive to make the match fair; Pikachu hits Hitmontop with Thunderbolt, while Brock sends out Forretress, who hits Hitmonlee with Rapid Spin. Misty angrily tells them that she could have handled it; Ash and Brock reply that they knew she could, but they still wanted to have one last battle together as a group. Touched by their words, Misty orders Politoed to use Bubble, which devastates Hitmonchan. Pikachu and Forretress then continue their assault on the other two, much to the brothers' dismay.
Meanwhile, an observing Jessie and James comment on the brothers losing. Meowth cuts in, and on his command, Wobbuffet presses a button that causes two goals to appear on opposite ends of the field. The Trainers all notice this, and much to their horror, the goals start to come together, trapping Ash, Misty, Brock, the brothers, and all of their Pokémon inside. The brothers become distraught and reveal that they were hired by Team Rocket to battle and tire Ash and the others out, with the expectation of being paid. Fortunately, Kim uses a handy pair of scissors to cut the net away, releasing everyone. The brothers and their Pokémon quickly surround Team Rocket and angrily ask about their money, much to Jessie's annoyance. This distraction and the brothers' destruction of the net allow Ash, Misty, and Brock to escape. They order Pikachu, Politoed, and Forretress to attack Team Rocket, the brothers, and their Pokémon. As a result, they are all sent blasting off.
Afterwards, Ash tells Misty how great it was watching her battle, and she thanks him. Then, he informs her that he and Brock brought her bike, and Misty's excitement quickly diminishes. On the path to Pewter and Cerulean Cities, Misty tells Ash not to forget to look after himself and Pikachu. She also tells Brock to try to not fall in love with all of the girls, which makes him laugh. She then says that she needs to tell Ash one more thing: "Just keep on doing your best." Ash asks what she means, and Misty sadly responds by saying that it is going to be different without her there.
Misty then remembers how she first met Ash, accidentally fishing him out of a lake and angrily pointing him in the direction of the Viridian City Pokémon Center. She also remembers all of the experiences she shared with Ash, Brock, and Tracey as they traveled through Kanto, the Orange Islands, and Johto. She then recalls how it was an accident that she met Togepi, but Ash tells her that he believes no matter what, they were always meant to meet and become friends. Brock agrees, and tells them that after all of their adventures, they have become best friends. Misty and Ash agree and continue down the path.
Eventually, the path splits into three smaller paths, with one route heading towards Pallet Town, another heading towards Cerulean City, and the third heading towards Pewter City. Ash and Misty start to say their goodbyes, when Brock suddenly interrupts, telling them that he just received an email and needs to return to Pewter City. The three bid each other farewell, and before leaving, Brock gives Ash a small picnic complete with cutlery, while Misty gives him a handkerchief to wrap it in. Ash is touched by their gesture and begins to cry. With that, they all separate, and Ash, upset about his companions leaving, runs the rest of the way home.
The next day, Ash and Pikachu are eating their breakfasts when Delia mentions that Gary returned a couple of days ago. As a result, Ash rushes to Professor Oak's Laboratory, but is dismayed to learn that Gary has already left. Tracey tells Ash that Gary didn't mention where he was going, only that he woke up saying he was feeling inspired and quickly left before being asked what he meant. Professor Oak mentions that Gary must have wanted to make a fresh start, as he left all of his Pokémon, sans his Blastoise, at the lab before leaving, and that they have no idea when they will see him again.
However, Ash catches up to Gary and asks what his hurry is. Gary responds that he needs to keep moving, and that there is still a lot of traveling to do and a lot more to learn about Pokémon. Gary then asks Ash what he plans to do now, and Ash is forced to admit he doesn't know. Gary advises him to wait for a while and think about it. When he starts to leave, Ash gives Gary his half of the broken Poké Ball back. Gary thanks Ash, and sets off on his journey. Later, Ash sits by a tree and tells Pikachu that he doesn't like the feeling of being alone. Suddenly, they notice Ho-Oh, which is heading towards the Hoenn region. Knowing that Hoenn has a lot of Pokémon he has never seen before, Ash decides to do what Gary did and make a fresh start and head to Hoenn. He starts to run home, but falls into a pitfall trap.
Immediately afterwards, Ash is confronted by Team Rocket. James calls out Weezing and orders it to send a Smokescreen down the pit. Ash tries to think of something to do, and he remembers Misty and Brock's final words and parting gifts. He gets an idea, and after fishing them out of his backpack, has Pikachu cover his mouth with the handkerchief given to him by Misty while he climbs out with the cutlery given to him by Brock. Ash confronts Team Rocket, informing them that his friends will always be with him. He orders Pikachu to hit them with Thunderbolt, blasting them off.
Back home, Ash tells Professor Oak and Tracey that he has decided to do what Gary did and leave all of his Pokémon besides Pikachu at the lab. Professor Oak guesses that Ash is heading to Hoenn, and Ash tells him that he plans to meet Professor Birch in Littleroot Town. Then, Delia arrives with new clothes and a new backpack for her son, having guessed that he would be leaving soon. She also has his ticket for the ferry that departs from the Seafoam Islands to Hoenn. Professor Oak also gives Ash a brand new Pokédex that contains all of the information on the Pokémon that reside there. In addition, Tracey tells Ash that he will take care of his Pokémon while he is away. With a renewed sense of determination, Ash gets ready to set off for Hoenn.