After Lavender Town, Red travels to Celadon City and defeats Erika and her Vileplume, winning himself another badge. He goes into a Team Rocket secret base and releases many of the Pokemon they have captured. He also meets their leader, Giovanni. He wakes up, battles and captures a Snorlax with the PokeFlute. He then gets the Good Rod and uses it to catch a Psyduck. He defeats Koga and earns himself another badge. After training and countless battles, his Charmeleon finally evolves into Charizard. He and Blue then help a lady escape Team Rocket in Saffron City. She tells them of the Master Ball project and that Team Rocket has captured Silph Co. and is forcing their scientists to experiment on Pokemon to advance the project quicker. They take her to the police station, though two Rocket members are outside waiting for the girl. Deciding the enterprise to not be worth his troubles, Blue announces his leave, saying he's going to become the Champion. Angered by Blue's apparent apathy for Team Rocket's victims, Red physically accosts him on the grounds that anyone who doesn't care about the suffering of Pokemon has no right to be a Trainer. Appeasing him, Blue acquiesces. Red orders him to go to the police station while he storms Silph Co. Blue and the secretary attempt to dissuade him, telling him he can't do it alone, to which Red responds he has his Pokemon.
Red storms Silph Co. and releases Team Rocket's Pokemon and human captives, receiving a Lapras from a grateful scientist in the process. Red makes it to the top floor and encounters Giovanni for the second time. Giovanni states that children have no place in an adult's world. After Red tells him the police are on their way, Giovanni muses how Team Rocket's entire plan was stopped by a little boy. He tries to take his leave, but Red blocks his path, telling him no matter how many times he tries, he'll always be there to stop his plans. Giovanni decides he'll have to punish Red for his rudeness and takes a Poke Ball from his subordinate who insists that a little boy like Red isn't worth his time. Giovanni responds that Red's no mere boy. He and Red each toss a Poke Ball, sending out Nidoqueen and Charizard respectively. During the fierce battle, Nidoqueen gains the upper hand. Desperate, Red orders Charizard to use Flamethrower, to which Giovanni has Nidoqueen counter with Surf. The two attacks collide, causing an explosion which takes out the side of the building. As Red and Charizard lay defeated, Giovanni remarks at how weak Charizard's Flamethrower is as he recalls Nidoqueen and prepares to escape in a helicopter. When Red asks him how he can be so terrible to Pokemon, Giovanni responds with three things: Pokemon mean business, a successful business relies on a little sacrifice and that if there's one thing he won't do it's let his business fail. Standing up, Red insists that Pokemon aren't meant to be tools for business, they're meant to be humans' friends, but Giovanni repudiates his moral authority on the matter, pointing out that Red just allowed his friend to get hurt and lie there defeated, calling him disgraceful and saying Red wouldn't possibly be able to understand his ideals. Having both a competitive and philosophical victory, Giovanni laughs and flies away. The Master Ball project is frozen and likely terminated.
Red then battles Sabrina, defeating her Alakazam with Haunter and winning his sixth badge. He also beats the Karate Master and gets a Hitmonlee. He travels to Cinnabar Island and defeats Blane, earning his seventh badge. While there, he enters the Pokemon Mansion and reads a book containing a journal entry about two newly discovered Pokemon in South America. Red overhears two people talking about the Viridian City Gym Leader - the strongest of them all - finding out they've returned. Remembering how strong the previous Gym Leaders were, Red excitedly pedals off, unable to wait to battle and learn from the master of Gym Leaders.
Upon arriving in Viridian City, Red encounters Blue again and finds out the latter has already beaten the Gym Leader, now having enough badges to enter the Pokemon League. Red then enters the Gym and is shocked to discover that Giovanni is the leader. At first Red's in denial, saying that the previous Gym Leaders used different Pokemon and ideas for battling, but they all had one thing in common in that they loved their Pokemon; Giovanni meanwhile is nothing but a sick man who only uses them for business. Unfazed by Red's rebuke, Giovanni asks him the question: does he want the Gym Battle or not? Red affirms, but says he's no longer fighting for a Gym Badge, but for all the Pokemon in the world that Giovanni's hurt with his crimes, declaring Giovanni to be an enemy of all Pokemon. Declaring that Red will be treated differently like Blue was, Giovanni switches his usual six Poke Balls with two Ultra Balls containing his two most powerful Pokemon. The first one is Rhyhorn, who defeats Red's Victreebel, Snorlax, Kabutops and Jolteon. Rhyhorn was only defeated by Hitmonlee, who got knocked out himself in the process. Giovanni recalled Rhyhorn and sent out its evolved form, Rhydon. Down to his last Pokemon, Red calls out Charizard. The battle begins and the two Pokemon strike each other with Megaton Punch. However, when Charizard goes to strike with Megaton Kick, Rhydon ducks and strikes it with Fury Attack, sending Charizard crashing into the wall behind Red. Giovanni prepares to end it and launches his final attack with Rhydon. Not giving up, Red calls out for Charizard to use Seismic Toss. At the last second before Rhydon can strike it, Charizard gets up and dodges to the right, grabbing Rhydon from above and flying into the air before coming down and slamming Rhydon to the ground. Rhydon faints, giving Red the match.
Giovanni offers Red the badge but he refuses to accept anything from the leader of Team Rocket. Remembering the Trainer he used to be during the battle, Giovanni disbands Team Rocket so that the badge would be coming not from the gang's boss but from the Viridian City Gym Leader. Accepting this, Red takes the badge.
Red races off to Victory Road as Giovanni watches him go. After Red's out of sight, Giovanni holds up a Poke Ball that could possibly be his Charmander's, saying he wants a new start alongside his Pokemon.
- Red is supposed to beat Giovanni at Silph Co. like in the games.
- Blue and Red never battle in this anime, while they did in the games.
- Giovanni only uses two of his Pokemon, Rhyhorn and Rhydon in the anime while in the games he also uses Dugtrio, Nidoking, Nidoqueen (although Nidoqueen was seen defeating Charizard), and Persian (Pokemon Yellow).
- Red never gets a Master Ball.
- Saffron City isn't overrun with Team Rocket Grunts like it was in the game, only Silph Co. is.
- As seen in the opening, Red has 65 Pokemon as of Silph Co. and afterwards.
- Giovanni's Rhyhorn's Thunderbolt attack wasn't suppose to hurt Jolteon because of its Volt Absorb ability.