Mewtwo Returns is the sequel to Pokémon: The First Movie. It tells the story of what happened to Mewtwo and the super-clones after the events on New Island In addition to the main film, it also includes The Uncut Story of Mewtwo's Origin in the bonus features, which was edited out of the English dub of Mewtwo Strikes Back because it was considered too dark for the first film's G rating.
The movie begins with Mewtwo telling its story, from the opening of the first movie in the labratory, to the end of the events on New Island. Then the film skips ahead to the present, where Giovanni and Domino are seen watching satellite images of Mt. Quena. They see Mewtwo standing on the top of Mt. Quena, and the film then moves to Mewtwo, who is telling the clones that they would remain on Mt. Quena, hidden away from the world and human beings. The movie then shows Ash Ketchum, Misty, and Brock traveling through the Johto Region. They see Mt. Quena and are amazed at how huge it is. Misty asks how they will get across, and Brock answers her, saying that the only way across is by a bus that will leave lunchtime that very day. Misty then spots the bus traveling along Mt. Quena with its load of passengers and the trio runs, trying to catch it. As they run, it begins to rain.
The film then goes to Jessie, James and Team Rocket's Meowth. They laugh at Ash and his friends for "running around in the rain" and ridicule them for not having brought shelter from the storms. Meowth, however, is worried, having read in the guide book that Mt. Quena's unique atmospheric conditions create typhoons, blizzards and thunderstorms. A strong wind then picks up the trio and blows them away.
The film goes to Luna Carson at the foot of Mt. Quena, talking to the bus driver. The driver leaves. Brock, while running down the mountain, trips and crashes into Misty, who crashes into Ash, and they roll down the side of the valley. Brock sees Luna and immediately falls in love, but Misty drags him away by the ear and Ash protests that they have to catch up with the bus. Luna deters him, saying that it is too dangerous, and they go into the cabin.
Meanwhile, the bus is traveling along the side of the mountain when a strong wind picks it up and threatens to blow it off the mountain. Mewtwo, however, has been watching the bus on a screen and lowers it safely to the ground with its psychic powers. The people on the bus are amazed at this and unable to explain how it happened.
Back at Mt. Quena, the clone Pikachu asks Mewtwo why it saved the bus. Mewtwo states that if there was an accident, there would be human rescuers, and the clones could be discovered. When the clone Meowth says that perhaps Mewtwo cared about the humans, it says that it "could never feel compassion for humans."
Meanwhile, at the lodge where Ash and company are staying, Ash asks if it is possible to get across the valley some other way; Luna says that he could take a boat ride down Purity River and get across the valley that way. Misty exclaims that she would love to and that she loves the water. They go outside to taste the water. Brock, Misty, Ash's Pikachu, and Misty's Togepi all say that the water is incredible; only Ash refuses to be impressed and says that "it kinda tastes like something's been swimming around in it." They then take a boat ride, but Misty discovers that there are thousands of Bug Pokèmon living around the river and paddles back to shore.
At the cabin, Ash asks if there is any other way across and Brock says that they could go striaght over the top of Mt. Quena. Luna discourages them from doing so, saying that the height and the weather are too difficult for humans to endure and the only things that live at the top of the mountain are wild Pokèmon that are strong enough. A flock of Butterfree goes flying overhead and Mewtwo, seeing them, tells the clone Pikachu and Meowth, who are watching the Butterfree with it, that since the clones were not born into the world, they did not belong in it.
Back at the lodge, there is a knock on the door and Domino and Cullen Calix ask to spend the night. When introducing themselves, it is discovered that Domino works at the Pokèmon institute, Cullen is a professor of medicine, and Luna is a researcher of Pokèmon. Cullen has come to study the water of Purity Spring, saying that it has rare minerals that have an amazing effect on human and Pokèmon health; Luna, however, is worried that the spring could be in danger from people attempting to take the water.
Team Rocket interrupts the conversation, reciting their motto and managing to capture Pikachu and blasting off in their balloon, now equipped with rocket launchers. After Ash says that he has to follow them and get Pikachu back, Luna decides to lead them up Mt. Quena after Team Rocket. Cullen and Domino come along.
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