Pallet Town (Japanese: マサラタウンMasara Town) is where Ash Ketchum from the anime was born and his rival in the games. It is his hometown throughout his adventures and his mom stays in it all throughout. This Town's Pokémon lab is also where Professor Oak lives and studies Pokémon. Pallet Town appears in Pokémon Red/Blue and Pokémon Yellow with 2 houses, one Red's and one Blue's, and the Laboratory where Professor Oak is located. The Japanese motto is "Masara is the colour of pure white beginnings". It is the smallest town in the game.
Many famous people come from Pallet Town, such as Ash Ketchum, Gary Oak, Red, Blue, Leaf, and Samuel Oak. There are only two routes linking Pallet Town to other places, which means that it doesn't have much commerce. One of the routes (Route 21 south) is a water route so they get almost nothing coming in from there and the other is the only place where they actually travel on, Route 1 (North). The main trading city is Viridian City, where they get their supplies as there is no Pokémart or Pokémon Center in the town (though in the game, your mom heals you). This is where all Pokémon trainers start out, as it is where Professor Oak gives out the Starter Pokémon.
This house is where you begin your journey, it has two floors. In your room (the upper floor), there is a PC, which the player can store and deposit items on and a SNES. When the player first starts the game, there is a Potion which can he/she can withdraw. After he/she obtains the Pokédex and his/her Starter Pokémon from Professor Oak, the player's mom starts to heal the player's Pokémon.
Your Rival's house, has only one floor. Once, Professor Oak has given you the Pokédex, Daisy (your rival's sister) will give you the Town Map and also grooms one of your Pokémon.
Professor Oak's Lab
Professor Oak lives and studies Pokémon in his lab. This is where Professor Oak, will give you your first Pokémon - Bulbasaur, Charmander or Squirtle.
If the player presses A on the TV in the player's house in the living room, the message log will say "Four boys are walking on a railroad track." This is a reference to the movie Stand By Me, based off the book by Stephen King.
Pallet Town has no gym unlike other settlements in Kanto.