Satoshi's Pikachu journeys with its trainer to New Island, answering an invitation to battle the world's greatest Pokémon trainer. Along the way, Pikachu helps Ash and his friends navigate the stormy seas Mewtwo creates to block their path.

Arriving on the island, Pikachu sees Mewtwo challenge the trainers using cloned Pokémon. After Mewtwo's clones defeat the challengers, Pikachu is captured alongside other Pokémon for cloning. Ash pursues Pikachu to the cloning laboratory, where Team Rocket's Meowth is also cloned, and destroys the machinery, freeing Pikachu and the others.

Pikachu leads the freed Pokémon to confront Mewtwo and his clones. When Mewtwo pits Mew against the clones to prove his superiority, all original Pokémon battle their duplicates except Pikachu and Meowth. Pikachu refuses to fight its clone, defying Mewtwo's orchestrated conflict. Meowth similarly reconciles with his clone, recognizing their battle's futility.

During the fierce psychic battle between Mewtwo and Mew, Ash intervenes and is petrified. Pikachu desperately tries to revive Ash with electrical attacks, but fails. Heartbroken, Pikachu cries alongside the other Pokémon—both originals and clones. Their collective tears heal Ash, reviving him and demonstrating the deep emotional bonds between Pokémon and trainers.

Witnessing Ash's sacrifice and the outpouring of compassion, Mewtwo is profoundly moved. This experience shifts his perspective on life and purpose. Mewtwo subsequently departs with Mew and the clones, erasing the memories of all involved. Pikachu's defiance and actions contribute to Mewtwo's realization that individuals should be judged by their choices, not their origins.