Ash Ketchum, Dawn, Brock and their Pokémon arrive in Michina Town. As the group relaxes in a nearby river, some watermelons suddenly float towards them. While enjoying the watermelons with their Pokémon, a boy named Kato and his sister Kiko appear who justify that the watermelons were theirs and were kept to cool in the flow of the river. Kato and Kiko then challenge Ash for a tag battle in return of the watermelons. Ash and Dawn thus plan for a tag Pokémon battle against them using Ash's Pikachu and Dawn's Piplup against Kako's Heracross and Kiko's Beautifly. Ash and Dawn win the battle with good teamwork and also request Kato and Kiko to join for eating watermelons. After that, Kato and Kiko suggest Ash and the gang visit the local temple ruins. Whilst visiting a lake, a typhoon suddenly strikes up, but two mysterious individuals named Sheena and Kevin summon Dialga who ends the typhoon. Giratina arrives and attacks Dialga, but Sheena uses her ability to communicate with a Pokémon's heart to quell their conflicts with each other, sending Giratina back to its dimension. Palkia then arrives to save Dialga from another typhoon, and Sheena, once again, uses her ability to sync with the two to thank them. Taking the kids to the temple, Sheena and Kevin explain that they investigate disruptions in time and space, and worry that Arceus, the creator of the dimensions, is to awaken, and that he is responsible for the encounters between Dialga, Palkia, and Giratina.
Sheena explains that centuries ago, Arceus saved Earth from a meteor storm and nearly died with the loss of his sixteen Life Plates, but a man named Damos saved him. In gratitude, Arceus fused five of his plates into the Jewel of Life, which turned the town of Michina into a paradise. Arceus asked Damos to return the Jewel to him, but Damos proceeded to betray Arceus and attacked him. Arceus was forced to go into a long slumber, but he vowed to awaken and judge humanity. Sheena reveals that Damos is her ancestor, and that she possesses the actual Jewel of Life, planning to give it back to Arceus to pass judgement. Arceus arrives, and Sheena offers him the jewel, only to discover that it is a fake. Arceus would have destroyed humanity, but Dialga, Palkia, and Giratina arrive to stop their creator. Upon Sheena's request, Dialga sends Ash, Dawn, Brock, and Sheena back in time to the day (a solar eclipse) when Damos betrayed Arceus, but Dialga sends them further back, only for the heroes to be apprehended by Damos' lieutenant, Marcus, and his Heatran.
The kids, Pikachu, and Piplup are imprisoned, but the latter two are released by a notch-eared Pichu. The kids meet Damos, who was imprisoned by Marcus, who is actually the true culprit behind the betrayal, using his Bronzong's Hypnosis to manipulate Damos into becoming his pawn. Unaware of Marcus' true role, Sheena tells him everything about the future. Pikachu, Piplup, and Pichu free the kids and Damos. Arceus arrives to collect the Jewel of Life, hidden in Marcus' scepter, but the fooled Sheena ends up being the one who betrays him. Arceus is forced into a pit and is wounded by silver water and electrical attacks. Marcus' intention is to kill Arceus himself to save the future. Sheena and Damos use their abilities to free the Pokémon under Marcus' control, including Heatran and Bronzong. Ash and Dawn (with the help of Chikorita, Cyndaquil, and Totodile) confront Marcus, and Ash obtains the real Jewel of Life.
Arceus absorbs the Jewel of Life, restoring his own life force and those of the future. Arceus rescues his saviors from the collapse of the temple. Ash, Dawn, Brock, and Sheena are transported to the future, only to discover that Arceus is still furious and has defeated Dialga, Palkia, and Giratina. Arceus spots Ash and recognizes him due to history's alterations, and reverses the destruction he caused and heals his servants. Ash and the others discover Damos has put them on a mural, thanking them for their help in saving the world. Arceus and his followers depart to their respective dimensions, with Arceus realizing that he is truly a part of the world that he created.
In the credits, it is shown that Marcus works for Damos after his defeat, Alberto is still hitting on Alice as Darkrai looks on, and Newton visits Zero in prison while the Shaymin discovers a new location.
- The storyline continues in Little Bear's Adventures of Pokémon: Zoroark - Master of Illusions.
- Duck will reference the events from Little Bear's Adventures of Pokémon: The Rise of Darkrai & Little Bear's Adventures of Pokémon: Giratina and the Sky Warrior in this film.
- The end credit song for this film will be: "The Final Countdown", by Europe.