This is how the Story Mode goes.
At the beginning of the story, Peach and Daisy watch Mario and Luigi battle, while Yoshi watches on his TV, cheering them both on. After Luigi's defeat, he and Mario shake their hands. However, Bowser bypasses the Midair Stadium, laughing at Mario and Luigi. The Koopa King releases a purple symbiote in the arena, which then forms a demonic beast. Mario fights it by his own.
Mario suddenly encounters a giant R.O.B.. The robot attacks Mario by using its eye lasers. Mario dodges the beams, and eventually destroys it. Suddenly, coming out of nowhere, Bowser drops in. He notices Mario. He attacks Mario, and kicks him out of the stadium, making Mario soar in the air.
Meanwhile, Luigi awakes. He jumps up to the clouds. Bowser releases the symbiote again. After Luigi defeats it, the symbiotic monster falls off of the clouds and lands on the ground. Looking across the sea of clouds, he sees Mario unconscious. He wakes Mario up. He and Luigi come to an understanding that they are working towards the same goal, and head off.
Elsewhere, in an island jungle, King K. Rool steals Donkey Kong's Banana Hoard, which he proceeds to run off. Upon battling several of the Kremlings, Donkey Kong readies to follow K. Rool and get his treasured Banana Hoard back. Two Kremlings fire three Bullet Bills towards DK. Out from the foliage behind, Diddy Kong and Funky Kong appear and with Diddy's Peanut Popguns in hand, intercept them all. Donkey Kong, Funky Kong and Diddy Kong set off after K. Rool. Upon finding it, they are attacked by the Kremling King.
Meanwhile, Kirby is being chased by the Halberd which then knocks him off his warp star, forcing him to land on the ship. He spots a Arwing coming from the distance. It swiftly dodges the beams fired by the Halberd, but is hit by a claw-like device that is projected from the ship. The Arwing is knocked out of the sky, blowing Kirby off the Halberd before proceeding to crash on Donkey Kong Island.
Meanwhile, after his Arwing crashed, Fox runs through the jungle, and finds Yoshi, Kirby and Donkey Kong. Mecha-Bowser emerges from the lake. Another battle ensues. Following Mecha-Bowser's destruction, Donkey explains his dilemma to Fox. Diddy becomes angry and physically drags Fox along with him to help find Donkey Kong. Deeper in the jungle, they battle against K. Rool; but dissolves into the symbiote. It turns out that the K. Rool they fought was a fake, set up as a trap by the real K. Rool, who attempts to kill the group. The heroes actually escape, as Bowser laughs.
The next morning, Lucas is walking through the city. He is attacked by the Pig King Statue, a living statue of Porky Minch. Lucas is pursued throughout the zoo by the giant statue, whose intent is to kill Lucas. Lucas soon gets his foot snagged on an unearthed root, and desperately tries to free himself as the statue approaches. Realizing he can't escape, he covers his eyes, being certain of impending doom. Suddenly Ness appears and blasts the statue with his PK Fire, and destroys it with his PK Starstorm. Unfortunately, Porky himself appears out of the statue in his spider mech and attacks the boys. Both Ness and Lucas work together and defeat him. Afterwards, Ganondorf appears on a large hill and attacks Ness and Lucas. They escape Ganondorf, and bump into Ash, the Pokemon Trainer. The Pokémon Trainer lets out his Pokémon, Squirtle, Ivysaur and Charizard, to join Lucas and Ness.
The carnage of a recent battle are shown. Marth walks in the battlefield until he sees Ike zooming at him.
In another area, two Waddle Dees approach Luigi who is frightened by them. To Luigi's surprise, King Dedede and Meta Knight suddenly appear and attack him.
Deep in a forest, Link is seen traveling, intent on finding something with his fairy, Navi, by his side. He walks up to a stone containing the Master Sword. With the Triforce symbol appearing on his left hand, Link pulls the sword out. As he leaves, he passes by Yoshi sleeping on a stump and Bowser. Link stops and looks up at the symbiote before getting his sword ready for battle while Yoshi joins him. After passing through the forest, they proceed to follow Bowser.
Meanwhile, on a floating island base, Zero Suit Samus is breaking in. She loads her gun and travels through the base, ending up in a room where Pikachu is trapped inside a tube. The machine sucks out Pikachu's electricity, painfully shocking the Pokémon in the process. Zero Suit Samus, seeing Pikachu in pain, disables the tube. Zero Suit Samus and Pikachu enter into a surveillance room and on one of the monitors Zero Suit Samus then sees what she was looking for: her Power Suit.
Kirby is seen on a long field. Suddenly King Dedede drives by and Kirby runs after him. Mario and Yoshi run by the Masked Man without noticing. Ness, Lucas and the Pokemon Trainer appear to join. They proceed to battle against the villain. They defeat the Masked Man. Afterwards, Kirby runs by Mario and Yoshi, and the three spot Peach in the carrier. King Dedede proceeds. Fortunately, Kirby cuts the arm with his Final Cutter. King Dedede makes a U-turn and heads for the heroes. Mario shoots a fireball at it, and it burns into ashes.
In a control room, Bowser gives orders to Bowser Jr. to locate King Dedede, and gives him his location. Lucas, Ness and Pokémon Trainer are by a tall anticline, and see Charizard flying into a cave. They follow Charizard through the ruins of a temple, where Wolf appears. Fox appears, joins the team and defeats Wolf. The heroes continue the search for Charizard.
Meanwhile, King Dedede is in his castle, looking at his trophies of Mewtwo, Ghastly King and Kamek. He puts a timed badge, bearing an image of his face on it, on all of them, before Bowser visits the castle. Mario, Link, Yoshi and Kirby enter King Dedede's castle, which they enter. They chase Bowser all the way out of the castle and to a cliff. Mario attempts to attack Bowser, but he uses his shell as a shield and Mario is forced to stand down. Link shoots an arrow at Bowser which he dodges, falling off of the cliff. Bowser ends up in his Koopa Clown Car, and flies away with Peach. Meanwhile, Ganondorf is watching on a monitor, and Ridley appears on it, seeming to order Ganondorf to do something. Ganondorf complies, and bows down.
Meanwhile, Pokémon Trainer, Lucas, Ness, and Squirtle fight through a cave. They find a trophy of Ivysaur, which Pokémon Trainer retrieves into a Pokéball. They continue to fight through the cave, until they find Charizard. They fight Charizard, and Pokémon Trainer captures Charizard with his Pokéball. The two eventually end up in a tower.
Meanwhile, the two swordsmen find Medeus. They fight and defeat him. Ness, Lucas and the Pokémon Trainer prepare to fight Mewtwo and defeat him.
Fox fights through the jungle island with his group, eventually seeing Bowser who shoots Donkey and attempts to do the same to Fox. Fortunately, Falco arrives and shoots Bowser with his Arwing, but Bowser retreats. The symbiote transforms into a giant evil false Donkey. After defeating giant Donkey, Falco leaves. However, Diddy Kong stops him and tries to tell them that the universe is in danger. The three continue through the jungle and summon the Great Fox and the four hop in to pursue the ship.
Meanwhile, Pikachu and Zero Suit Samus go through a warehouse-like place to find her Power Suit. Samus puts on her Power Suit. They soon enter a large spacious chmaber where Ridley appears, grabs Samus and destroys the Power Suit. After they defeat Ridley, Samus gets a new Power Suit and head outside.
Elsewhere, a group of Pikmin start to attack Emperor Bulblax. Captain Falcon jumps out of the Blue Falcon, and Falcon Punches the monster, sending it flying in the sky. Falco drops Donkey out of his Arwing, and with his Peanut Popguns, the monkey shoots many Kremlings. Captain Falcon and Captain Olimar run to assist.
Meanwhile, the Halberd is engaged in a laser duel with the Great Fox, while Marth, Meta Knight, Lucas, Pokémon Trainer, Ness and Ike are watching. Meta Knight flies up the mountain and sees the Ice Climbers on their way to the ships already. Meta Knight flies ahead of them and the Ice Climbers follow. The two become a team and the Ice Climbers and Meta Knight climb the mountain together. After their team reaches the top of the mountain, they see Ghastly King. He jumps down and challenges Meta Knight to a fight. After the fight, Ghastly King falls to the ground, dead. Suddenly the Halberd pushes the Great Fox (which it had captured) into the peak of the mountain, causing an avalanche. The Ice Climbers fall down the mountain.
Meanwhile aboard the Halberd, Solid Snake comes out from underneath his cardboard box and ventures the ship. Then he hears someone coming and he hides under his box. Meta Knight and Lucario pass by, but Lucario senses the aura of Snake. After Lucario uncovers Snake and stops Meta Knight and Snake from fighting each other, he senses Primids behind them with aura, but they are soon defeated, and the three venture further through the Halberd. They eventually reach a room with Peach and Zeldas' trophies in cages. Shadow Bugs surround the trophies and generate an Evil Peach and an Evil Zelda. The three battle the evil princesses, break the cages. Snake makes a gesture before he, Lucario, and Meta Knight leave the room, telling the princess to stay in the room. Zelda transforms into Sheik, and Peach giggles as the two leave the room and venture to the deck of the Halberd once Snake and the others were gone.
In the sky, Fox's Arwing is hit, damaging its wing as he attempts to take down the Halberd. One of his shots almost hits Peach, causing Sheik to jump onto the Arwing and force Fox to eject. Sheik and Fox begin to battle on deck, but then Peach offers Fox some tea. As Sheik sips her cup of tea, Fox accepts the offer.
The alarm goes off in the island base as Samus and Pikachu run through the corridors. The two break through a wall and enter a huge room full of Subspace Bombs, and the villains(who are playable). They defeat them one at a time. The villains decide to join the heroes. Donkey Kong, Diddy Kong, Captain Olimar, and Captain Falcon burst through another door and stand alongside Samus and Pikachu. All of the other playable characters appear with the heroes.
Captain Falcon summons his Falcon Flyer to carry the heroes and villains out of the base. They escape before the massive explosion occurs. All of the characters watch the gigantic explosion.
Suddenly a gigantic battleship comes out of Subspace and shoots towards the horizon, bringing another area into Subspace. Tabuu is aboard and controls the cannon. Suddenly, Tabuu stares into the distance and sees the Halberd approaching. He aims the cannon at the Halberd and after a shot that went through the middle of the Halberd, it is brought down. Although it seems like this is over, The Falcon Flyer, the Arwing, Olimar's Hocotate Ship, Mario's Golden Plane and Samus' Spacecraft fly out of the explosion. Now frustrated, Tabuu aims all his cannons at the ships. Mario flies right through the battleship, thus destroying it. Tabuu retreats, followed by the entire gang.
The group looks up at Tabuu. His wings emerge and in one blast, he turns everyone but Mario into trophies.
Mario goes to revive the rest of the trophies. King Dedede is on his way up to Tabuu when he is attacked by Wario and Waluigi. They start laughing at him but Mario, Luigi and Ness come and help King Dedede back up. Wario and Waluigi are shocked to see the three as a team. They go up to Tabuu, while Mario, King Dedede, Luigi and Ness follow. Soon, the whole gang arrives at The Great Maze where they must go through all the parts of the Super Smash Bros. World and defeat all the "dark" bosses and characters. After defeating all "dark" bosses and characters, they finally reach Tabuu. Tabuu is about to attack the whole gang again and turn them all into trophies, but Mario stops him.
Tabuu then attacks Mario but is defeated, yelling in pain as all the worlds that were brought into Subspace are brought back. The last area to be brought back is the Final Destination. All the characters are returned back to the regular Smash World and the player then sees the Final Destination at sunset. The credits pass while it shows a few pictures of the various cut-scenes in the game. THE END then appears on the screen with the secret Smash Coin right next to it.