In a world where human beings own and train their Pokémon creatures to battle one another, the rarest such creature is Mew, a benign floating being that few have ever seen. Yet after human scientists discover a fossilized hair sample from Mew, they clone and re-engineer the creature into Mewtwo. While they were successful at creating the most powerful Pokémon ever, the sentient being, who longs to understand his place in the world, decides he must destroy all humans and their trained Pokémon.
Meanwhile Ash Ketchum and his young trainer friends, Misty and Brock, are relaxing one day when Ash is challenged by another trainer. With the aid of his first Pokémon, the electrified Pikachu, Ash easily wins and proves he's one of the best trainers around. Thus, it doesn't come as much of a surprise when he and his friends are invited to a party hosted by someone who claims to be the world's greatest Pokémon trainer.
Eager to prove their mettle, Ash and his friends set out for New Island, but are unknowingly followed by Ash's arch rivals, Jessie, James and their Pokémon mascot, Meowth who collectively make up Team Rocket. With only a few trainers making it through a storm to the island, Ash and the others discover to their surprise that the great master is none other than Mewtwo.
Learning that the megalomaniacal Pokémon plans to clone the existing Pokémon into genetically superior beings and thus rid the world of the originals and their human trainers, Ash and his friends, along with their Pokémon and an appearance by the original Mew, do what they can to stop Mewtwo and his evil plans.