Eggman was working on a new device under Bowser's orders, with Metal Sonic on guard. Eggman finally finishes his invention: a lazer gun with the smash ball symbol on it. Metal Sonic asks what it does, but Eggman says it's a suprise, and laughes evily.
Mario and Yoshi are relaxing in a grassy field, when they saw an angry mob of toads. Mario and Yoshi fought off the angry mob of toads, the leader carrying a bag. Mario defeated the leader and opened the bag to see Toad. Toad gives Mario and Yoshi a map with the whereabouts of other heroes.
The story switches to Villager in his house. He looks out the window and sees Tom Nook running from a bunch of Villagers. They seemed to be controlled by something. Villager and Tom Nook were the only people in the village not being controlled. Soon, Tom was caught by the mob and taken away. Villager decided to escape the village and search for help.
Chrom and Marth are in their castle when they are confronted by Eggman. Eggman zaps Marth with the ray. Marth then decides to attack Chrom, as the two fight. Chrom runs away, seeking help.
Mario and Yoshi get a note saying Bowser kidnapped the princess,and decide to find assistance at Hyrule.
Meanwhile at Hyrule, Link is fending off hostile forces. Up in skyworld, Pit informs Magnus that Palutena is missing. They decide to split up: Magnus will go find Palutena, while Pit will help Link in Hyrule. Pit comes down and wipes out most of the enemies.
Bowser,Gannondorf,Wario,Mewtwo,Meowth,King K Rool,Wolf and controlled Tom Nook and Marth are plotting their next attack. They pull up Mario and Yoshi on their screen. Bowser sends Mewtwo,Wario, and Marth to take them down.
At the field, Mewtwo turns on his teammates and defeats them. He grabs Marth and gets beamed up someplace. Mewtwo arrives at the headquarters of a team founded by Meta Knight after the discovery of the mind-control rays. The team consists of those two, along with Sonic, Stanley, and Falco. They locate Chrom and Meta Knight sends Falco on his arwing to recruit them. Meanwhile, Sonic suggests they go to Tails' place so he can make an Anti-Mind Control Ray.
Mario and Yoshi follow the map to Hyrule so they can find Link, when they are attacked by Neo Metal Sonic. Luigi comes in to help defeat Neo Metal Sonic, as the classic trio defeat the boss.
Meta Knight, Sonic and Stanley (Mewtwo stayed behind to guard Marth) arrive at Tails' house, but Tails is captured by Controlled Shadow. The heroes defeat him and free Tails. The heroes tie up Shadow while Tails builds the machine. After a while, Tails finishes the ray and uses it on Shadow, and proceed to untie him.
Peach wakes up on an airship in chains, unable to use her powers. She sees Zelda and Palutena, also unable to use their powers and in chains. In another room, Bowser watches through the window, smirking.
Mario,Luigi, and Yoshi see the airship. Many controlled Toads attack them, but they are helped by Link and Pit, who also saw the airship. Mario puts the map in his pocket as they go towards the airship.
Ness is on a cliff and sees the airship, and tries to use PK thunder on it, which proves ineffective. Ness turns back and sees Samus' airship. Samus comes out and says she could use his help to defeat the upcoming threat.
Sonic,Meta Knight and Stanley come back with the machine and used it on Marth. Meta Knight asks Marth to join his group and he says yes.
Bowser comes in with the ray. Peach starts squirming to get free, but Bowser knocks her out. He uses the ray on Zelda and Palutena and is about to use it on Peach as well but she is narrowly saved by Samus and Ness. Samus and Ness try to run from the airship with an unconcsious Peach, but Mario,Luigi,Yoshi,Link, and Pit back them up.
Peach wakes up with Mario and the gang in Diddy Kong's hut. Diddy says he will help if they can help him find Donkey Kong, who has gone missing.
Villager is escaping the controlled village on a raft, when Falco picks him up on his arwing. Falco says Villager can trust him and asks him if he would like to join his team. Villager nodds.
Bowser enters a room, and claims the controlling machine was merely to stall the heroes until he found out a way to ressurect Tabuu. A shot of Tabuu in a tube is shown.
Donkey Kong is searching for a captive Dixie, while he is beating up King K Rool's minions. He sees Magnus chasing after an airship and decides to help him. Palutena ejects from the airship and attacks them. They defeat her, and Rosalina comes and uses her magic to bring her back to normal.
Pokemon Trainer, with Pikachu at his side,see the Great Fox. Fox ejects and asks them for help. The three get in and chase after the airship.
Controlled toads are ambushing Tails' house. Megaman fends them off, and Tails gives him an Anti-Mind Controlling Ray, and tells him to use it on the toads. He does and they turn back to normal. The arwing picks the two up.
Kirby and King Dedede see the airship from dreamland and split up. Kirby notices the Great Fox crashlanding and goes there. He sees Fox, Pokemon Trainer and Pikachu and joins them. Captain Falcon picks them up in the blue falcon.
The Arwing lands on a deck where Tom Nook and Zelda attack them. Megaman uses the machine to turn them back to normal. The team are ambushed by the Yellow Devil, but they defeat him.
Bowser summons Kamek to cast a spell to revive Tabuu,but the spell backfires and all of Tabuu's energy absorbs into Bowser.
Mario's group find the mutated Bowser causing destruction and get ready for battle. The Arwing and Blue Falcon fend him off. Bowser roars, doing damage to the vehicles. Fox,Pokemon Trainer,Pikachu,Kirby,Captain Falcon, Falco, Villager, Tom Nook, Zelda, Megaman and Tails eject from their vehicles and join Mario, Link, Peach and the gang. After Bowser's defeat, he explodes, causing the heroes to get seperated.
Fox is woken up by Chrom, who askes for his help. Fox nods and they chase after the airship.
Dixie is in a cell, guarded by Meowth. A sword breaks through the bars and defeats Meowth. It was Shulk. The two see Meta Knight, Mewtwo, Marth, Sonic and Stanley on the Halberd and join them.
Mario, Megaman, Link, Peach and Pikachu wake up chained to a wall in a boxing tournament.They watch Little Mac beat many boxers until he finally beats King K Rool. King K Rool aims his Controlling Laser at Little Mac but he dodges and frees the heroes and they escape.
Kirby and Zelda wake up in an abandoned palace.They see Paper Mario fighting enemies in one of the rooms. The two help him defeat the enemies.
Krystal is being taken away by minions in the main room of the palace, but Toon Link busts in and saves her. The palace starts to crumble, as Zelda, Kirby, Krystal, Paper Mario and Toon Link all meet up and try to escape. They make their way out but are surrounded by minions, but DK, Magnus, Palutena and Rosalina save them.
Luigi, Yoshi, Falco and Tom Nook wake up in a bomb factory. They get ambushed by minions, but are saved by Bomberman. The Halberd lands by them and picks them up.
Fox is in his arwing with Chrom when he sees Zelda,Kirby,Krystal,Paper Mario,Toon Link,DK, Magnus, Palutena and Rosalina and picks them up.
Pit and Samus see Toon Zelda being chased by Gannondorf at a canyon. They help her out and defeat Gannondorf. They are ambushed by an army of minions, but Mario and his team come.
Ness,Diddy,Tails,Villager and Pokemon Trainer are locked up in Bowser's Castle with the Wii Fit Trainer. They are attacked by minions. After the minions are defeated, Captain Falcon busts in with his Falcon Flyer and saves them.
The Falcon Flyer picks up Mario,Peach,Pikachu,Link,Megaman,Little Mac,Pit,Samus and Toon Zelda.
Olimar crashlands his spaceship at an ice mountain. There he finds the Ice Climbers fighting off minions, who were after a power pellet the two found on their adventures.Suddenly, Pacman appears and eats the pellet,powering him up so he can eat most of the minions. The three team up to defeat the remaining minions. The Falcon Flyer picks them up.
Jigglypuff is in a cage on the airship, with Bowser, who lost his powers after the battle and is now a skeleton, extracting Mr.Game&Watch's energy, in hopes of gaining more power. Snake busts in, defeats Bowser and frees Jigglypuff and G&W. They escape and see the Halberd and Falcon Flyer battling the airship.
Snake, G&W and Jigglypuff see Gannondorf,Wario and Wolf on the ship. The heroes battle Gannondorf,Wario and Wolf until Mario, Peach,Link,Pikachu,Megaman,Little Mac,Pit,Samus,Toon Zelda, Ness, Diddy, Tails, Villager, Pokemon Trainer, Wii Fit Trainer,Olimar,Ice Climbers,Captain Falcon, and Pacman join from the Falcon Flyer and Shulk,Dixie,Sonic, Meta Knight,Mewtwo,Marth,Stanley,Luigi,Yoshi,Tom Nook,Falco and Bomberman join from the Halberd.
Wolf,Gannondorf, and Wario enter a wormhole as the airship breaks down. The group splits up: Mario,Peach,Megaman,Link,Pikachu, Little Mac,Pit,Samus,Toon Zelda,Dixie,Diddy,Tails,Sonic,Pokemon Trainer, Wii Fit Trainer,Captain Falcon, and Pacman go in while the Ice Climbers,Olimar,Shulk,Ness,Villager,Meta Knight, Mewtwo,Marth,Stanley,Luigi,Yoshi, Falco,Tom Nook,Bomberman,Snake,Jigglypuff, and G&W pile into the Halberd.
Fox sees a wormhole and the Arwing goes through it.
On the other side of the wormhole,in a dark palace,Meowth,King K Rool and a brainwashed King Dedede are waiting for the other villains. Ganondorf,Wario and Wolf arrive through the wormhole. They send Wario and Dedede out to defeat any heroes.
Back on the other side, the powerless Bowser sits in the broken down airship when the malformed form of Tabuu's energy turns Bowser back to normal, possesses him, creates a wormhole and goes through it.
The Halberd lands at a village being wrecked by subspace minions. The group defeats most of them, but the remaining ones grab Bomberman and drag them through a wormhole. The heroes pile into the halberd and go in.
Mario and his group end up in a dark subspace wasteland. They find Wario, controlled Dedede, and their minions. They defeat them. Megaman uses the Anti-Mind Controlling Ray on Dedede, and the team hears a loud rumbling. Wario decides to join the heroes as the Arwing flies by. Fox lets them in as they scout the area.
A short cutscene follows. Bomberman is tied up in the dark palace. Eggman comes in and fires his Controlling Laser at Bomberman. Tabuu (in Bowser's body) appears and destroys the machine, and claims Eggman's service is 'at it's end.' He then creates a vortex under Eggman's feet, and Eggman falls in.
While in the Arwing, Mario,Link,Peach,Megaman,Sonic and Pacman get mysteriously transported to a room in the dark palace, where controlled Bomberman is waiting. The heroes defeat Bomberman and free him.
Tabuu/Bowser tries to enslave the remaining villains (Ganondorf,Wolf,Meowth,King K Rool,) but the villains refuse and fight Tabuu/Bowser. Tabuu then transforms into a giant deranged blue monster with wings, four arms, and bright red eyes and a dragon-like head. The heroes in the palace evacuate as Tabuu tears it to shreds, reducing the area to a platform surrounded by an endless vortex.
Mario and his gang confront Tabuu,now calling himself Dastraal,The Subspace God, who drops Bowser out of his hand. Bowser is weakened because Tabuu drained most of his energy when he transformed into Dastraal.He grabs Peach and Link with his lower arms as Mario and his gang of heroes fend him off.
The Arwing and the Halberd arrive,each blasting one of the lower arms of the collosal Dastraal,freeing Peach and Link. The heroes in the Arwing and Halberd eject as the heroes and villains are forced to team up to defeat Dastraal as the final boss begins.After Dastraal's defeat he claims he won't go down alone and grabs the villain characters in his hands (minus Mewtwo and Wario, since they reformed) as he falls, throwing them straight into the vortex, before exploding.
A wormhole appears where Dastraal met his demise, and the heroes go through.
Back in the normal world, our heroes say their goodbyes to each other and go home, free of the threat of the villain's plotting or Dastraal's destructive nature. Wario walks away from the group and grins evily, lightly teasing a sequel.