Back in Pallet Town, Ash is congratulated with a party for representing the town so well in the Pokémon League. The gang decide to have their Pokémon out for the party, as they deserve recognition as well for their hard work. Charizard stays inside, for obvious reasons. Ash goes to a food stand to order for the party. It is secretly run by Team Rocket. Jessie, James, and Meowth spice up the food to an extreme to distract the people and take their Pokémon. They fail, and get a taste of their own recipe. They convert their stand into the balloon. They have managed to steal Pikachu and are floating away with Pikachu dangling below. Ash tries to stop them. Pidgeotto bursts the balloon, but they have a backup and continue to float. They begin to drop piles of bombs on the party, and the people scatter to escape being blown to bits. In a desperate move, Ash sends out Charizard who is more interested in lunch than saving Pikachu. That is, until one of Team Rocket’s bombs explodes on the food table which makes Charizard furious. Charizard flies up towards the balloon. They toss some more bombs, and Charizard flings the bombs right back at them. The balloon explodes, and Ash get back Pikachu. After the incident, as proof he still is not obedient Charizard blows a huge fireball at Ash burning him to a crisp. Back at Oak’s lab, Ash is asked to go to the Valencia Islands to help Professor Ivy with a problem. On their way out of Pallet Town, they are attacked by a Fearow which is the same Spearow that Ash had thrown the rock at in the first episode. Ash ends up in the same tree that Team Rocket crashed into, and are glared upon by some Pidgey and Pidgeotto who are hiding from the other Spearow. Ash shakes Team Rocket out of the tree, and calls out Pidgeotto to lead them out of the tree. The Fearow attacks hurting Pidgeotto. Determined to win, it evolves into Pidgeot who then defeats the Fearow. Pidgeot stays behind to guard the Pidgey and Pidgeotto from that Fearow and the gang continue on their way towards the Valencia Islands.The gang stop at a convenience store to pick up enough food and supplies to last them the year’s four month journey to the islands. They spot a booth where they are having a contest and the lucky winner gets a free ride to Valencia Islands by blimp. Ash gets really lucky and wins it. They approach the Blimp which seems broken down and old looking. It is secretly controlled by Team Rocket’s blimp brigade. Jessie and James guide them to their first class seats. Jigglypuff hitches a ride, too. The blimp is very tippy and Team Rocket cannot control it. After stabilizing, Misty notices Togepi is missing. They search everywhere, but first spot Jigglypuff under a white sheet that they think is a ghost. Misty spots Togepi high up and goes after it, Bulbasaur helping her to keep balance on the thin rails. Misty saves Togepi. They then try to keep the blimp stable until they land at the island.

Ash is sad about his loss at the Pokémon League. He is not speaking to anyone, and when Misty comes in to try to cheer him up it quickly turns into an argument between the two. Pikachu brings a quick finish to the argument with a thundershock on everyone. Ash and the gang decide to head out to cheer on Richie for his sixth round. Richie fights the match hard, and unfortunately loses. After coming out of the match, Richie is determined to try harder for next year which inspires Ash to do just the same. As they talk, both of their Pikachu play behind them until they fall into a hole dug by Team Rocket. They rush to save their Pikachu, but fall into another hole. Ash struggles to get out, but upon sliding back down, the hole collapses into deeper inside the ground. Jessie and James fish out the two Pikachu from the other hole and trap them in a cage. They get out of the hole with the help of their Pokémon Pidgeotto and Happy, and defeat Team Rocket. Back at the Pokémon League, they receive their badges for participating and are treated to a great display of fireworks. Team Rocket try to dig below the arena to get in, but end up being blown away along with the fireworks. Ash says goodbye to Richie and proceeds back home to Pallet Town.

Ash is to battle Richie in the next round of the Pokémon League competition. Misty is looking up some information on the computer about him. She finds that Richie won all of his first four rounds with just one Pokémon. Ash goes to the Pokémon Center and finds Richie there who was just picking up his Pokémon. Ash promises Richie a great battle the following day. Ash picks up his Pokémon and returns to the small house where he is staying to sleep for the night. The next day, they receive a phone call. It is Richie’s voice, and rudely insults Misty over the phone. She hands it to Ash, and the voice tells Ash to meet him outside at a specific location and to bring Pikachu. When Ash arrives, he finds Richie (it is a dummy, except Ash thinks it is really Richie) and suddenly is trapped by Team Rocket. They throw him in their van and drive away, keeping Ash from the competition. Ash escapes using Squirtle to flood the van, and Team Rocket are up to their eyeballs in water. The back bursts open, and Ash starts to run back to be in time for the competition. Team Rocket get in his way again, bent on keeping him away from the league competition. He uses Bulbasaur and Pikachu to whip and shock them. He continues towards the league, but Team Rocket catch up on bicycles. They use Weezing to smog him out, but he hops on a bicycle and continues along. They catch up to him in their balloon and hook the bicycle. They start to float away, and so Pikachu is carried up by Pidgeotto to give them another big shock. Pidgeotto then starts to carry Ash toward the stadium. Meanwhile, back at the stadium after already being given ten additional minutes after the battle was supposed to start, they are about to declare that Ash has forfeit the match. Just as they almost declare Richie the winner, Ash shows up floating toward the stadium in the Team Rocket balloon. They begin the battle, and Ash sends Squirtle against Richie’s Butterfree named Happy. Squirtle loses, and so Pikachu leaps out to battle and defeats Happy. Richie calls his Charmander and it defeats Pikachu. Ash is out of reliable Pokémon, as Bulbasaur would lose for sure, and so he desperately sends out Charizard. Charizard actually battles, and defeats Charmander. Richie lastly sends out his Pikachu named Sparky. Charizard blows Sparky around a bit, deeming it to not be a worthy opponent and lays down for a nap. Since Charizard refused to battle Sparky won, and Ash was defeated by Richie. Despite his immense disappointment, Ash looks up and congratulates Richie, and they are still friends in the end.