The group stop at a Pokémon Center for a rest and get a message from Professor Oak who wants to talk to them. When they talk, he discusses Muk and offers Ash a Pokédex upgrade. Ash takes the upgrade and they are on their way. Ash and the group wonder about what could be inside the egg Brock has been taking care of since Ash found it in Grandpa Canyon. Misty thinks it could be a water type Pokémon and Brock thinks its a rock type Pokémon.
They leave the Pokémon Center and Team Rocket is disguised as egg sellers, selling eggs that looks like the one Ash and his friends have. Team Rocket tries to convice Ash and his friends to buy or trade one of their eggs for theri egg. Ash and friends refuse. Team Rocket, desperate, throws all of their fake eggs into the air and when Ash and his friends are looking up, Team Rocket steals their egg and they run off.
While Ash and his friends are looking for them,Team Rocket hides out in a small cabin. Meowth takes care of the egg while they are there. Meowth sleeps and even eats with the egg. Ash and friends follow a trail of broken pieces from the fake eggs to the cabin where Team Rocket is hiding out. They decide to run and grab the egg, even though its dangerous.
Ash brings out Pidgeotto, Misty brings out Staryu, and Brock brings out Geodude. They quickly run into the cabin, surprising Team Rocket. James brings out Weezing and tells it to use Poison Gas. The egg goes flying and Pikachu catches it. Misty takes it just in time to see it hatch. It is Togepi, and they all fight over who should keep Togepi. Togepi, likes Misty a lot because Misty was the first thing it saw and thinks Misty is its mother. Everyone is distracted until Team Rocket remembers that they have to keep Togepi no matter what. Then Ash sends them flying.
They have a tournament and decide that the winner of the tournament gets to keep Togepi. Meowth, Ash, Misty and Brock enter the tournament. Meowth tells Jessie and James that they can't enter the tournament because they didn't help take care of Togepi at all. Meowth then panics because he has no Pokémon to use in the tournament. He asks Jessie and James for help but they refuse, then he remembers the he's a Pokémon.
First was Brock vs. Meowth. Meowth had to be both Trainer and Pokémon against Onix, but Meowth wins aganist Brock's Onix by pouring water on it and then scratching it. Next, Ash and Misty battle. Misty tries to send out Staryu, but Psyduck came out instead. Ash sends out Bulbasaur. Ash remembers that Psyduck uses Psychic attacks if its headache gets too bad. He tells Bulbasaur to lick Psyduck on the head, and then tickle it. Psyduck soon goes back into its Poké Ball. The final battle is Ash vs. Meowth for Togepi. Ash wins by having Pikachu use Thunderbolt on Meowth. Meowth is dragged away by Jessie and James and a heartbroken Meowth says goodbye to its Baby. Ash wants to take it, but Togepi still wants to go with Misty, so Misty gets Togepi, which disappoints Ash and Brock.
- This is the second episode where Ash and Misty battle. The first was "The Water Flowers of Cerulean City."
- Ash remembers what happens if Psyduck gets a massive headache.
- Ash had Bulbasaur tickle Misty's Psyduck into submission. Tickle became an official attack as of Generation II
- Brock mentioned that the egg might hatch into a Golem. This was false because only baby or basic Pokémon can hatch from eggs.
- This episode marks the introduction of a Generation II Pokémon.
- This is the second episode with a Generation II Pokémon in it, with the first episode to do so being IL001: Pokémon - I Choose You!, showing Ho-oh.
- Meowth: "AHH! I don't have any Pokémon to battle with. Guys would you please lend me your Pokémon?"
Jesse and James: "Not a chance!"
Meowth: "AHHH! What'll I do? Huh? Oh yeah, I forgot. I am a Pokémon. I can battle for myself."
- "Being your own trainer sure is tough."
~Ash about Meowth being both a trainer and a Pokémon.
- Misty: "Quick! Get back in the ball!"
Ash: "You're not allowed to call it back."
Misty: "Grrrrr. He's right. OK, Aim for Psyduck's head Bulbasaur."
Ash: "It's head? Yeah, like I'm that dense. Bulbasaur, go lick Psyduck on the head."
- "Now, use the tickle attack."
Ash inventing a new move.