At the Pokémon League tournament held at the Indigo Plateau, the rivals Red and Blue begin their heavily anticipated match to decide the League Champion for the year's competition, with Bill, Green, and Professor Oak among the excited audience. A simultaneous drop of their Poké Balls reveals Blue's Charizard and Red's Saur, much to Bill's shock as the odds are stacked against Red. Taunting Red for a misprediction, Blue orders a Fire Spin that Saur barely dodges, but as Charizard lunges in for a follow-up attack, Saur surprises it with a burst of PoisonPowder. Red follows with a Razor Leaf that Blue is forced to assist his addled Charizard in dodging, before Red switches for Snor to continue.
However, Blue is quick to respond with his Machamp, and through its four arms it blocks Snor's limbs and prevents it from attacking. At Blue's invitation a show of physical strength begins on the battlefield. Eventually, Machamp easily lifts Snor with its four arms, before spinning it about to render Snor dizzy and slamming it onto the floor. As the floor cracks from the sheer impact, Blue sneers at Red for his earlier care of Machamp. Bill is certain that Red has a backup plan, when he realizes that Red secretly commanded Snor to use Harden in anticipation of further attacks from Machamp. However, Blue surprises everyone by having Machamp Karate Chop the floor, using the shattered debris as a lever to catapult Snor into the air and out of the battlefield. Professor Oak, muses at his grandson learning to be flexible like Red in his battle strategies. Just as Snor is about to be disqualified for going out of bounds, however, it plummets from mid-air and crushes Machamp with a Double-Edge as the spectators scramble in fright. Red calls to Blue, teasing him for underestimating Snorlax's maneuverability, while the Professor notices that Red has learned to apply knowledge to his instinctive tactics, like Blue.
Noting Machamp to be down to a third of its health, Blue switches in the Ninetales both boys had encountered. Realizing Snorlax to have taken heavy damage itself, Red retrieves Snor as both boys exchange friendly banter; Professor Oak chuckles at how the two have not only learned each other's skills, but also emulated their respective traits. As Red mulls over his next choice, a shadowed foursome watch the boys silently, seemingly evaluating to themselves the better of the two.
Eventually, Red's apparent indecision forces Blue to launch his attack; dodging the flames Red releases Poli. Using Fire Blast, Blue surrounds Red and Poli in the formation of flames, and also sends Poli crashing into the ceiling on a current of super-heated air. A substitution to Pika ends similarly, and to keep up the fire attacks Blue brings Charizard back into the fray. To the horror of the spectators Red makes a switch back to Saur, which causes Bill to become angry at Red for his decision. Mocking the sentimentality of Red to finish the match with the Pokémon they received from Professor Oak, Blue sends in Charizard for the kill when a Vine Whip securely binds Charizard. Blue is surprised at the presence of a cloud in the arena, to which Red explains that Poli and Pika had formed the lightning cloud when they were flung up to the ceiling; Poli's water was super-heated and condensed in midair while Pika electrified the cloud. With Saur's vine acting as a lightning rod Charizard is not only trapped but severely shocked by the combination attack of Red's three closest Pokémon, and as the smoke clears Charizard eventually collapses. The crowd roars for Red, who, while congratulating his Pokémon, eventually faints from exhaustion.
Shortly after, the award ceremony is held for the three Trainers of Pallet Town, with Green being considered in third place since Professor Oak withdrew from the competition. As the trio head home, the Mythical PokémonMew, who had been watching all the while outside the stadium, flies away.