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Ash, Misty, and Brock decide to take a break in a meadow, along with Pikachu and Psyduck. The group begin discussing the rumor that the rare Farfetch'd has been spotted in the area; Ash immediately decides he wants to catch it. Brock, Ash, and Pikachu then decide to get some water for the group from a nearby spring. Left alone, Misty begins hearing sounds, and she thinks it is Psyduck. All of a sudden, a Farfetch'd appears nearby and begins parading in front of Misty, and then runs into the woods. Misty, eager to catch the Pokémon, calls Psyduck into its Poké Ball and runs after it. She chases after the flying Pokémon, but then, just after turning a corner, bumps into a boy, Keith, and falls over. The boy apologizes, hands Misty herbag that had fallen to the ground, and runs off in a hurry.

Sad from losing track of the Farfetch'd, Misty returns to the meadow where Ash and Brock are looking for her. She reveals that she was trying to catch a Farfetch'd, which causes Ash and Brock to become infuriated that she was sneaking around behind their backs. They soon calm down after hearing from Misty how much of an awesome Pokémon Farfetch'd is. Brock hands Misty the water they he had gotten for her, but when she goes to put it in her bag she realizes something shocking: the backpack is filled with rocks! She deduces that she must have picked up the wrong backpack when she bumped into the boy in the woods, and is upset because all of the Pokémon she had ever caught were in that backpack.

Back in the woods, Keith is walking down a path with the Farfetch'd by his side. He looks inside the newly stolen backpack to inspect what he has found, which turns out to be five Poké Balls. He returns to his tent, which is filled with other backpacks that likely were inherited by the same way Misty's was: by using his Farfetch'd as a distraction so he could steal other Trainers' Pokémon. Just then, Keith and Farfetch's spot Team Rocket walking by. As it turns out, Team Rocket is also looking for a Farfetch'd. Keith and his Farfetch'd approach Team Rocket, who are disappointed by the fact that the Pokémon already has a master. The boy states that he was planning on getting rid of his Farfetch'd, along with a Staryu (Misty's) and Starmie (also Misty's), and proposes that they could work out some sort of deal.

Keith and Team Rocket stop at a dock to take a small boat across a river, when the boy "remembers" something he forgot. He runs off, saying he'll be right back, leaving Team Rocket with Farfetch'd and all of Keith's Pokémon in a backpack. Naturally, they try to steal them, and take the small boat themselves, but this is exactly what the boy wanted them to do; a cork comes loose in the bottom of the boat, causing it to sink. Jessie and James lose Arbok and Weezing (and Lickitung), whose Poké Balls are floating down stream. When Team Rocket goes into Keith's bag to get Staryu and Starmie to help themselves out of the water, they discover the bag is full of rocks, just as Misty's was earlier. Farfetch'd gathers the Poké Balls, and sends Team Rocket over a waterfall. The Pokémon swims to shore to find Keith waiting for him; the duo has succeeded at yet another plot of thievery.

Ash, Misty, and Brock run to the nearest police station, and tell Officer Jenny what had happened to Misty's Pokémon, still believing the whole thing was an accident. Jenny tells them that Misty is the fifth victim of the backpack-switching thief just that week; she informs everyone of how she has been trying to catch the perpetrator, to no avail.

Back at Keith's tent, he begins talking to himself about his situation. He states that he and his Farfetch'd had been together for a long time; they had been together ever since he found it injured and nursed it back to health. He reveals that just after his Farfetch'd was healed, they started stealing other Trainers' Pokémon. He believes the only way to survive is to steal because they are too weak tobattle; he genuinely wishes there was another way to get by. Inside the tent, Misty's Psyduck releases itself from its Poké Ball and walks off without Keith, or Farfetch'd, noticing.

Misty and the group take Officer Jenny to the place in the woods where she bumped into Keith. Just then, Psyduck appears from behind a bush. Misty asks her Pokémon some questions about where it was and where her bag is, but the Psyduck seems unable to provide any useful information. Desperate to find her bag, Misty has Psyduck try to lead the group to where it came from.

Team Rocket, in the Meowth Balloon, are extremely angry, and out to find Keith and their Pokémon. They run into him just as he's packing up his tent, and all of the Pokémon he stole, and ready to get on the road. The boy tries to return their Pokémon by saying the whole thing was just a joke, and in return he can just leave, but Team Rocket wants more. So Keith gives them a whole bag full of Poké Balls, along with his "apologies"; Team Rocket decides to forgive him, and they take off in their balloon with all of the Poké Balls.

Shortly after Team Rocket leaves, Ash, Misty, Brock, and Officer Jenny arrive, Psyduck having led them correctly. Everyone surrounds Keith, confronting him about his stealing. Ash expresses how much time and care Trainers put into raising their Pokémon. The group decides that they would have a Pokémon battle to teach him a lesson, so Keith could see how difficult a match is really. He then explains that his Farfetch'd is too weak to battle, and he has no choice but to steal Pokémon. Brock discounts this and says that Pokémon will become stronger with Trainers who work with them. Just as Keith begins to rebut, Farfetch'd expresses an interest in battling. Ash jumps in and sends out Bulbasaur to battle, and orders a Tackle attack from the Pokémon. With every strike of Bulbasaur's Vine Whip, Farfetch'd seems to becomes more and more energized to win. Keith, completely unaware of his Farfetch'd's techniques, witnesses an Agility attack, followed by multiple strikes of the Pokémon's leek; Ash's Bulbasaur is defeated. The boy says that he wouldn't have used Farfetch'd to steal if he had known it had such power. Ash, ready to send out Pikachu to battle Farfetch'd, is stopped by Misty, who wants to battle. To her dismay, she soon realizes that her only Pokémon is Psyduck. However, Farfetch'd begins to hit it on the head, enough so to give it a headache. Psyduck unleashes a powerfulDisable attack, sending the Pokémon flying into its owner. Misty and Psyduck, celebrate their victory over the Trainer that stole her Pokémon.

Meanwhile, Team Rocket is opening all of the Poké Balls that Keith gave them, only to discover that they all contain Voltorb. Angry that they have been tricked again, they throw the Voltorb over the edge of their balloon. All of the Pokémon, unfortunately, land directly where Keith and his Farfetch'd are, and they all self-destruct near him, Ash, Misty, Brock, and Jenny. Feeling defeated, the boy promises to stop his wrongdoing.

Back at the police station, Keith tells Officer Jenny that he'll give back all of the Pokémon he stole. Jenny informs him that he is lucky that none of the Trainers are going to press charges because they all got their Pokémon back; Misty expresses her joy to have her Pokémon back. Keith now says that he knows that it was wrong to steal, and that it was wrong not to believe in Farfetch'd. He decides to train his Farfetch'd to become even stronger, and the two head off.

Jessie and James, up in their balloon, consider telling their boss what happened, but Meowth convinces them not to; Team Rocket expresses embarrassment over being outsmarted by a kid. All of a sudden, they realize one Voltorb is left in their balloon, and it self-destructs, sending them "blasting off again".

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