In the anime Street Fighter Alpha: Generations, Goutetsu is a pivotal figure whose presence looms over the entire narrative, primarily as the master who set the stage for the conflict between his two star pupils, Gouken and Akuma. He serves as the foundational source of the Ansatsuken, or "assassination fist," a formidable martial arts style from which the techniques of later fighters like Ryu and Ken are derived. Goutetsu is credited with perfecting the iconic special moves Hadouken and Shoryuken, establishing him as a legendary and highly skilled martial artist who dedicated his entire life to his craft without reservation. Beyond these famous techniques, he was also proficient in bojutsu, the art of the staff, and possessed a secret arsenal of moves, including the Goushoken, a blast unleashed from the base of the palm, and variations of the Tatsumaki Senpukyaku.

Goutetsu's most significant role in the story is as the master to the two brothers, Gouken and Akuma. His physical appearance in the anime is distinct from his depiction in the video games; he is shown with short hair and a noticeably small stature, which contrasts with the more typical imposing frame of a martial arts master. The movie opens with a brutal confrontation between Goutetsu and his student Akuma, who has become consumed by the dark power known as the Satsui no Hado, or the "murderous intent". This climactic battle reveals the nature of their relationship: Goutetsu had previously tried and failed to dissuade Akuma from delving deeper into this forbidden and corrupting power. Unlike Akuma, Goutetsu could tap into the Satsui no Hado without succumbing to its side effects, presumably because he used it sparingly and maintained a more balanced, disciplined approach to martial arts. His motivation was not power for its own sake, but the preservation and teaching of a pure and effective fighting style. He valued diligence and despised weakness, expecting his students to grow strong through proper, disciplined training.

The conflict reaches its resolution when Akuma, now fully embracing the path of the Satsui no Hado, challenges and ultimately kills Goutetsu using the forbidden Raging Demon technique. Goutetsu is portrayed as accepting his death, as he was satisfied to see that his student had surpassed him in the art, even if it meant his own end. After killing him, a now demonic-looking Akuma takes the prayer beads from Goutetsu's body, a symbolic act of claiming his master's legacy and power for his own dark path. Goutetsu's death is witnessed by his other student, Gouken, who arrives at the scene to find his master's body and his brother transformed. This event serves as the central motivation for Gouken, who then refines the Ansatsuken style by removing its murderous energy, creating a purely combative martial art to teach to his future students, Ryu and Ken. Goutetsu's legacy is thus twofold: it is the source of the powerful techniques that define the series' protagonists, and it is also the catalyst for the eternal struggle between the light and dark paths of the Ansatsuken, represented by the sons of his two students.