The story begins with Red using his Poliwhirl to show some kids how to catch Pokemon. He soon happens upon some Team Rocket members and listens into thier conversation. He hears them talk of a "phantom Pokemon", so he immediately runs into the woods to try to find and catch it. He does find the Pokemon, which turns out to be Mew, but Blue is already battling it with his Charmander. Red roots for him to beat it, but Blue suddenly calls Charmander back. Red doesn't understand and sends out Poliwhirl to battle Mew, and he gets beaten badly. Blue explains to him that the reason he called Charmander back is because he could tell there was a big difference in strength. He gives Red the advice that you have to know your own limitations.
Red then goes to meet Professor Oak for the first time so that he can learn more about Pokemon. However, he accidentally lets all of Oak's Pokemon out of thier balls and they get loose, and Oak is under the mistaken impression that Red is a Pokemon thief. The two go to bring back all the Pokemon, and this is when Red creates a bond with Oak's Bulbasaur. Oak realizes that Red wasn't a thief after all and gives him Bulbasaur. He also gives Red a Pokedex, and Red goes off to Viridian Forest to start filling it up.
In the forest, Red meets up with Blue for a second time when Blue attacks Red's Poliwhirl. Blue explains that he thought the Poliwhirl was wild, but the two get into a fight. A wild Kangaskhan interupts thier fight, and they both pull out thier Pokedexes. This is when Red realizes that Blue is Oak's grandson. Blue attacks the Kangaskhan and can't figure out why he can't capture it. Red realizes, though, that Kangaskhan is trying to protect its injured baby. He forces Blue to stop attacking and uses a potion to heal the baby Kangaskhan. Blue is mad that he couldn't capture the Pokemon, but Red tells him that it isn't really winning if your opponent's at a disadvantage. Red and Blue then finally have a chance to formally introduce themselves to each other, and Red promises that he won't lose to Blue.
Red then moves on to Pewter city. Here, a wild Pikachu is loose, and people apparently think it's some kind of pest and are trying to catch it with nets to get rid of it. Red comes along and battles it with his Bulbasaur, capturing it in a Pokeball. The townspeople are very grateful and give him a big dinner. Red then goes to the outskirts of town to try to get to know his new Pokemon. While he's playing with Pikachu, Blue shows up and tells Red all about the Boulder Badge. He makes a challenge to Red to see which one of them can win the badge first, and Red accepts. However, unfortunately for Red, his Pokemon are low on health and the Pokemon center is closed down. The only Pokemon he has at full health is Pikachu, whom he hasn't tamed yet.
Red must go through several premliminary matches before he gets to battle Brock. He uses Poliwhirl and Bulbasaur, but they are so low on health that he can't afford to take even one hit. However, he manages to finish every battle with his first attack and not get hit once. He reaches Brock, but by this time Poliwhirl and Bulbasaur are too tired to battle anymore, and he has no choice but to use Pikachu. Pikachu is poorly trained, and it looks like Red will lose, until he shows his caring for Pikachu and Pikachu decides he really wants to win for Red. Pikachu thundershocks Brock's Onix inside its mouth and wins the battle. It turns out that Red and Blue were the only two people to win the Boulder Badge that day.
Later, Red meets Misty for the first time. She's trying to battle a Gyrados and not doing very well, so Red uses his Bulbasaur to help her out and they capture it. Misty then explains that Gyrados is actually her Pokemon, but it had been stolen from her a while ago, and when she got it back, it had just gone crazy and refused to obey her. Red is mad at the thought of Pokemon thieves, and the two decide to go to a Pokemon Center and call Professor Oak to see if he knows anything. Oak tells them all about Team Rocket, and how the organization steals Pokemon and uses them for lab experiments. Oak tells them that Team Rocket is probably after a moon stone that's near the area, so Red and Misty decide to go to Mount Moon and find it first.
Red and Misty head into a dark cave, and Red lights it up with Pikachu. They run into Team Rocket, and the two battle them together. It's a long, hard battle, and Misty gets knocked out. But Red wins in the end and carries Misty out of the collapsing cave. He then reveals to her that he managed to get the moon stone.
Misty brings Red back to her house, and it turns out she is very rich. Misty tries to tell Red that they need to strengthen thier Pokemon for the next time they battle Team Rocket, but Red is too busy bragging to Misty's servant women to pay attention to her. That night, Red is attacked by a Pokemon while he's sleeping. The next day, he decides to go battle the Cerulean Gym leader. Misty says she'll take him to the gym. Red soon finds out that Misty is the gym leader. Misty also reveals that she is the one who attacked him last night, because she was angry at his over confidence. He battles her and looses, and then realizes that she was right about needing to train harder in preperation for battling Team Rocket. The two train together for a few days, then head thier seperate ways.
Red then finds his way to Bill's cottage. He sees a weird Rattata, which turns out to actually be Bill, who accidentally crossed himself with a Rattata in an experiment. A Fearrow then grabs Bill and Red has to run to rescue him. Red beats and captures the Fearrow, then helps Bill get back to normal. In return Bill says he'll allow Red to use his Pokemon transporter, so that Red can keep his extra Pokemon with Bill and Bill will transport them to him any time he needs them.
Next, Red attempts to become a stowaway on the SS Anne, but he is caught and thrown off. He then meets the president of the Pokemon Fan Club, who invites him to become a member. Red goes back to his house and meets the other club members. Pay close attention when reading this part to catch the joke about tentacle porn- really. The club members admire Red's Pokemon for a while, and then it's revealed that there have been several cases of Pokemon kidnapping recently. Red thinks it has something to do with the SS Anne, so he runs off and this time manages to successfully stow away on the ship.
On the ship he meets Lt Surge. It turns out that Surge is the one who's been stealing the Pokemon. Red tries to battle him, but Surge is too powerful and has too many Pokemon, so Red runs away. However Surge catches him and throws him and his Poliwhirl overboard to drown them. Poliwhirl evolves into Poliwrath to save Red and the two jump back on the ship. Poliwhirl manages to beat Surge and toss him and his Electrabuzz overboard. They never find Surge, but all the stolen Pokemon are found and returned to thier rightful owners.
Next, Red enters a bike race. It turns out the race is sort of a Pokemon obstacle course, meaning people can use thier Pokemon to overcome the obstacles. Red does well and is in third place until all the racers to come to a Snorlax blocking the road. Red manages to wake it up using Bulbasaur's scent and get past, but then Snorlax chases him. He wins the race, which means he gets the prize of 10,000 money and many Pokemon items, but he has to spend all his money feeding Snorlax.
Red then ends up in Lavendar Town where he meets Mr Fuji. Fuji tells Red about how the tower in the town is haunted. Red just laughs it off, but then Red is told that Blue went into the tower two weeks ago and never came back, so Red runs off to find out what happened to Blue. When Red gets to the tower, he sees many Pokemon that have been turned into zombies which seem to be controlled by a purple haze. It turns out that Blue has been turned into a zombie too.
Red realizes that it's Gastly who is making these zombies, so he battles it and revives Blue. Red wants to leave, but Blue insists on going deeper into the tower to find out who's behind all this, so Red follows him. They find out that the one doing this is Koga, who is a member of Team Rocket. Blue battles Koga and ends up actually killing his Arbok in a way that's suprisingly gory for a Pokemon series. Red and Blue go back to town, and Fuji thanks Red for what he did, but Red tells him that Blue deserves all the credit.