As our heroes prepare to set off once more from a short break, they're unexpectedly confronted by a Wobbuffet. Misty suspects that it may be Team Rocket's Wobbuffet, when dozens more suddenly appear. Following the Wobbuffet down the trail, the gang finds themselves in Wobbuffet Village, a small town where everyone owns a Wobbuffet. A young man, Norio, walks over to greet Ash, Misty, and Brock, mentioning that the Wobbuffet Festival is currently being held: an annual event that celebrates all Wobbuffet. Meanwhile, Team Rocket is staggering into the same town famished. Jessie's Wobbuffet pops out, and just as its trainer is about to send it back to its Pokéball, a lady named Lulu approaches and invites Jessie, James, and Meowth into her home. Inside a small cottage, Lulu presents Team Rocket with a platter filled with burgers and sandwiches.
Finally getting some food to eat, they decide to go along with the "praising Wobbuffet" charade, and asks if there will be any other Wobbuffet at the festival. Lulu answers yes, and decides to put a yellow ribbon around Jessie's Wobbuffet, making it distinguishable from the others. She then takes Team Rocket to the Festival Symbol, a giant Wobbuffet standing in the middle of town. Looking down on the village from a nearby cliff, three young men send out their Fighting Pokémon; Hitmonlee, Machoke, and Primeape, and prepare to stir up some trouble. As Ash, Misty, Brock, and Norio are having fun playing, someone runs up to them and reports that a Wobbuffet has been attacked.
They arrive on scene, where the Wobbuffet's trainer, a little girl, sits there sobbing. Suddenly, another Wobbuffet attack is reported, and when the gang shows up, the Wobbuffet's trainer tells of the three mysterious attackers who did this. Hearing this, Ash immediately suspects Team Rocket, who are, speaking of which sneaking around the storehouse where the festival food is being held, planning to steal everything inside. Our heroes catch them red-handed, and Ash mentions the connection between them to the Wobbuffet attacks. However, Jessie and James deny ever doing such acts.
Lulu intervenes, telling the gang that Jessie, James, and Meowth must be innocent because they have a Wobbuffet of their own. A young girl steps in reporting another attack, which proves Team Rocket innocent. Ash, Misty, and Brock reluctantly apologize to the three and run off. Everyone is gathered around the Festival Symbol, witnessing another Wobbuffet being knocked 20 feet into the air.
The gang appears and confronts the ones responsible, who are the three Fighting Pokémon trainers. Norio takes a look at them and recognizing their faces, explains to our heroes that they came to Wobbuffet Village a year ago smashing windows and breaking down doors to train their Pokémon. However, Lulu's Wobbuffet saved the day as its Counter and Mirror Coat attacks defeated the three punks, which is why they've come back for revenge. Norio then sets off to find Lulu and Officer Jenny.
Bagging the last few portions of food, Team Rocket sees Norio, Lulu, and Officer Jenny headed for the Festival Symbol. Seeing this, they wonder what's going on. Challenged by Ash to a 3 on 3 Pokémon battle, the Fighting Pokémon trainers send out Hitmonlee, Machoke, and Primeape to fight. Ash calls for Chikorita, Misty chooses Poliwhirl, and Brock uses Golbat. However, just as it's about to get underway, Officer Jenny comes in and stops the match. She explains that since Wobbuffet never make the first attack, the founders of the festival honored this spirit, and therefore, no battles are allowed within the village at this time.
The three trainers decide that if they can't hurt any real Wobbuffet, they're going to attack the Festival Symbol instead. Hitmonlee, Machoke, and Primeape begin to destroy the monument, as the townspeople stand there helpless. Spying on what's happening, James and Meowth begin to sympathize for Wobbuffet over how much the other Wobbuffet and the Festival Symbol are being treated. They then decide that since the residents treated them so well, they should return the favor by stopping the three hooligans.
Suddenly, a bomb drops down and with a cloud of smoke, Team Rocket makes their dramatic appearance from their balloon. Ignoring the festival rules, Jessie challenges the three to a Pokémon battle and sends out Arbok. James chooses Victreebel in the same fashion. Hitmonlee uses Rolling Kick on Arbok, but it recovers and counterattacks with a Tackle. Machoke comes up and uses Karate Chop on Victreebel, who sends a pair of Razor Leaves in return.
Primeape jumps in front of Machoke to knock the leaves away. Jessie commands Arbok to use Wrap, but Hitmonlee's Hi Jump Kick stops it short, making it down for the count. Machoke defeats Victreebel with Seismic Toss as well. With no one else to use, Jessie has Wobbuffet battle. The three Fighting Pokémon trainers burst in laughter, and sends Hitmonlee to use Jump Kick, Machoke to Seismic Toss, and Primeape to do Fury Swipes. However, Wobbuffet uses Counter every time, and is left unscathed. T
he trainers decide to attack all together, but Wobbuffet's Counter proves to be stronger as it sends Hitmonlee, Machoke, and Primeape blasting over the horizon. The bad guys flee, and Team Rocket wins. Afterward, Team Rocket gets back in their balloon and prepares to leave peacefully. Our heroes, still shocked by their heroism, then spot Team Rocket stealing the bag of festival food not too far off. The gang gives chase, and Misty calls out Staryu to puncture a hole in their balloon. She succeeds, and Team Rocket is grounded. However, Jessie and James don't feel threatened, since battling is against the festival tradition.
Officer Jenny interrupts, telling them that battling is only forbidden inside the village, and since they're now outside of the town, attacking is perfectly legal. Ash tells Pikachu to use Thunderbolt, and Team Rocket's sent blasting off again. That evening, Norio and Lulu thank our heroes for their help and invites them to stay for the food, dancing, and fireworks that'll be at the festival. They accept the offer, and the group has a joyous time. Meanwhile, Team Rocket is stuck on top of a plateau. James is distraught over losing what could've been food, friends, and festival, but Jessie reminds him they still have one thing left: Wobbuffet!