In the Southeast Asian nation of Shadaloo, civil war has erupted between the forces of drug lord-turned General M. Bison and the Allied Nations led by Colonel Guile (Street Fighter). Bison has captured several A.N. relief workers, and via a live two-way radio broadcast, demands Guile secure a US$20 billion ransom in three days. Guile refuses and vows to track Bison down and place him on trial for his crimes, but his assistant, Sergeant Cammy, is only partially able to pinpoint Bison's location to the river-delta region outside the city. One hostage is Guile's friend Sergeant Charlie (Street Fighter) Blanka, who Bison orders taken to his lab for his captive doctor and scientist, Dhalsim, to turn into the first of his supersoldiers. Though Charlie is severely disfigured by the procedure, Dhalsim secretly alters his cerebral programming to maintain Charlie's humanity.
Col. Guile, Chun-Li Zang, Charlie Blanka, Ken Masters, Ryu Hoshi and others form an elite group of street fighters from all around the world to combat General Bison and his henchmen, attempting to stop his evil dreams of world domination.
The movie begins with Gouki (as Akuma is called in both the Japanese and English dubs of the movie) battling his master Goutetsu. Though both combatants show equal potency, in the end, Gouki is the victor, killing Goutetsu with the ''Raging Demon'' technique.
