On a secret island laboratory, the Pokémon Mewtwo was created, built from the DNA of Mew, a Pokémon believed to be extinct and whose DNA was recovered from fossils. However Mewtwo was angered about being only a lab experiment and destroys the lab. Afterwards he meets Giovanni, the head of Team Rocket, and makes a partnership with the Gym Leader. Giovanni ’trains" Mewtwo to use his powers, by defeating challengers in his gym and restraining Pokémon. When Mewtwo realizes he is merely a tool for Giovanni he destroys the headquarters and flies away.
Ash Ketchum and his friends, Misty, and Brock all receive an invitation to a party hosted by ’the world’s greatest Pokémon master" at New Island. However a mysterious storm brews, cancelling all boat rides to the island. Many of the other trainers are undaunted by the waves and use their Pokémon to traverse the sea, but neither Ash nor any of his friends have the Pokémon to do so. In the end they manage to make the journey using their aquatic Pokémon and are escorted into the island’s palace.
It is revealed that Mewtwo was the one to send the invitation and crated the storm to test the trainer’s will. Only Ash, Misty, Brock, and three other trainers made it through. Ash and the other trainers battle Mewtwo, but their Pokémon are easily bested by Mewtwo’s clones of Venasaur, Blastoise, and Charizard. Ash chases after Mewtwo when Mewtwo steals everyone’s Pokémon, even Pikachu, with a special set of pokeballs. Ash manages to rescue his Pokémon, but not before they are all cloned. Mewtwo reveals his plans to take over the human race and rule the world. Enraged, Ash lashes out at Mewtwo who easily blasts him away with a psychic attack. Ash is saved by Mew and a great battle erupts between the clones and the cloned, however Pikachu refuses to fight its clone.
The trainers are deeply saddened by the senseless violence they’re unable to bear it. As Mewtow and Mew fatigue, they prepare for one final attack. As they fire psychic attacks at each other, Ash runs into the center of the arena, trying to stop them. He is struck and collapses to the ground, his lifeless body turned to stone. Pikachu runs to Ash’s side and does anything he can to help its trainer, but not even a thunderbolt attack works. In deep grief, Pikachu begins to weep for its master, and all of the other Pokémon do the same. In this deeply emotional moment all of their tears miraculously heal Ash and everyone rejoices at the revival of Ash. Mewtwo, now enlightened, discovers the true relationship between Pokémon and humans and that the way you were born cannot change that. It leaves the island with all of the cloned Pokémon, erasing everyone’s memory about the horrible incident and returns them back across the sea.
The trainers are utterly confused at how they arrived at the docks. But as they spot Mewtwo and the clones flying by, Ash tells the story of how he saw Ho-oh on his first day of becoming a trainer.
Because of the huge popularity of Pokémon at its release, the movie was very successful. Initially it was released in three parts: Pikachu’s vacation, a mini-movie describing the events of Pikachu and friends at a vacation spot for Pokémon. The second part was origin of Mewtwo, a dark prologue describing the events on how Mewtwo was created. The third and final part is the actual 75 minute movie.