Ryo Sakazaki was sparring with Yuri & Robert. They received an invitation letter from Rugal Bernstein,who organized the King of Fighters tournament. Takuma received an invitation as well. They enter the tournament along with Terry & Andy Bogard,Joe Higashi,King,Ralf Jones,Clark Steel,Heidern,Athena Asamiya,Sie Kensou,& Chin Gentsai. The other fighters,including Kyo Kusanagi,enters as well.

Ryo,Takuma,& Robert are named the Mexico Team,Ralf,Clark,& Heidern are named the Brazil Team,and Athena,Sie,& Chin are named the China Team. Kyo was named Japan Team along with Benimaru Nikaido & Goro Daimon. King & Yuri are named the England Team along with Mai Shiranui. Rugal tells the Fighters that if any team member survive,They'll be facing him as the final challenge. The fight starts with Terry facing off with Clark Still and wins. Then,He fights with Choi Bounge,member of the South Korea Team,and wins again. Athena won against King and Takuma won against Goro. The Korean Team leader,Xanadu overpowers Chin and kills him. Ryo won against Ralf,Mai won against Sie,and Andy won against Robert. Chang Koehan,the Korean member,kills Brian Battler,member of the USA Team. Benimaru won against Joe,Yuri won against Heidern,and Kyo won against Lucky Glauber,the other member of the USA Team.

Ryo & Terry chats with Kyo,who reveals that his father,Saisyu was captured before the Letter was left before he came here. The Next day,Yuri won against Athena & Takuma. Chang kills the USA Team leader,Heavy D. Andy won against Benimaru and Ryo won against Terry. Kyo fights with Xanadu,who tries to kill him. Kyo gains the upper hand and kills him. Mai won against Chang,but lost Andy. Ryo soon discovers that the previous challengers are turned into statues and met Saisyu,who tells him that he's luring Kyo into a trap. Yuri won against Andy and Ryo won against Kyo,but not before he tells him about his father's whereabouts.

That morning,As Ryo & Yuri faced eachother,An explosion disrupts. Kyo fought his way to save his father with the help of Terry & Andy,who exposes Bernstein's crimes. Rugal reveals that he can take all of the techniques from the fighters. Kyo defeats Rugal,who triggers the self-destruct mechanism on the ship. The Fighters escaped before the ship exploded. Kyo & Saisyu embraced eachother. Ryo,King,& Terry watches as Yuri & Andy spent time with Robert & Mai.

Mid-Credits: Rugal,who escaped as well,was seen on the boat,meeting with Geese Howard,who survived,& ,who broke out of prison. They begun plotting against the fighters.