Dr. Fuji, a research scientist of Team Rocket, briefly describes in a prologue how his researchers uncovered a fossil of the remnants of Mew, one of the rarest Pokémon in existence, believed to be extinct (although this is not the case). Using the DNA of Mew and a research laboratory, they created Mewtwo. Mewtwo, is a Psychic Pokémon that instantly distrusts humans upon learning they intend on experimenting upon him, and using his amazing powers, he levels the base, killing Dr. Fuji and the other scientists. Head of Team Rocket, Giovanni, approaches Mewtwo and offers him an alliance, Giovanni promising to help Mewtwo control his powers. Mewtwo is "trained" over a course of several months but he soon is told by Giovanni that Mewtwo is merely his tool. In a fit of rage of being betrayed, Mewtwo destroys Giovanni's headquarters (how Giovanni survived is unknown...) and flies back to the remains of the laboratory island. He decides to find his own purpose and destroy all those who oppose him. He deems the relationship of humans and Pokémon living together horrific and declares that his reign will soon begin.

Elsewhere, Ash Ketchum and his companions Misty, Brock, and their Pokémon are resting. After Ash defeats a Pokémon Trainer who has a Donphan (a new Pokémon around the time the film was released), a Dragonite delivers a holographic message to the trio. A woman addresses them, inviting them to attend a party hosted by the world's best Pokémon Master at his palace on New Island. Excited, Ash wastes no time in heading to a seaport where he and his friends can catch a boat to New Island. Coincidentally, a deadly storm by Mewtwo has formed and the boat to the island has been postponed. Officer Jenny and Miranda addresses the other trainers who seem to have all been invited to the island. The other woman warns everyone that she fears it's a storm just like one long ago that took many lives. She tells a tale about the remaining Pokémon weeping in sorrow for all those lost in the storm. The water of their tears revived