You think you're so clever, Guile. Think about this. You have three days.  

                 If my twenty billion dollars are not delivered by then, the hostages will die,  

                              and the world will hold you responsible

The movie takes place in the fictional nation of Shadaloo in South East Asia, and ioy would seem that after months of fighting a multinational military force of the Allied Army had managed to enter the city. This army is fighting against the armed forces of drug lord turned General M. Bison, who has recently capturd a group of AN workers. Bison makes his demands in a two way TV broadcast with William F. Guile, the commander of the AN forces....if he does not get $20 billion in three days he will kill the hostages.

Guile's assistant Cammy is only able to partially trace Bison's signal. From that it can be determined that Bison's hideout is somewhere in the river-delta region outside Shadoloo. After one of the thugs of Victor Sagat, head of the Shadoloo Tong, attempts to assassinate Guile, which Guile himself quickly foils, he figures out that Sagat is the arms-supplier for Bison.

Guile attempts to infiltrate Ryu Hoshi and Ken Masters, two foreign operators who were arrested along with Sagat while fighting a cage match - they had tried to cheat Sagat beforehand by selling him fake weapons, and Sagat was not amused -, into Sagat's gang. He decides to stage a prison-break and his own death in order to find out the location of Bison's hideout. Guile's plan hits a snag when a GNT News Reporter Chun-Li Xiang, who is out for Bison's blood, finds out that Guile is alive and with the help of her partners, Sumo wrestler E. Honda and professional boxer Balrog, attempts to kill Bison and Sagat with a truck bomb while they are engaged in arms trade. The explosion destroys much of Bison's arms cache and kill a few henchmen still inside but fails to kill the dictator. The plan thus fails, and Chun-Li and her friends are captured.

Ryu and Ken are welcomed as Bison troopers. Once in the fortress, they free Balrog and Honda, and the four of them go to save Chun-Li, who is delivering an unexpectedly severe beating to a naive Bison. Unfortunately, the arrival of Honda and the others interrupts Chun-Li, giving Bison a chance to escape and trapping the five of them in a room flooding with gas.

A bug Ryu and Ken carry with them is tracked by satellite, and the AN is able to locate Bison's headquarters in an abandoned temple. Since Bison's air defenses are too deadly, Guile orders an amphibious assault on the base. As the troops comprising the strike force stand in salute and are preparing to march out, a group of peace negotiators arrives to inform Guile that the invasion is no longer authorized, since the ransom demand is about to be paid. Guile protests what he sees as appeasement and decides to go ahead with the assault.

Meanwhile Guile, T. Hawk and Cammy head up river to lead the attack in a stealth-boat. Bison notices the attack and manages to compromise the boat's stealth-mode, making Guile a perfect target. The boat is blown out of the water but luckily Guile and his comrades escape in time.

Guile heads in to Bison's fort alone while T. Hawk and Cammy stay and wait for the rest of the attack-party. Guile falls in to the laboratory of Dr. Dhalsim where he encounters his friend Carlos (Charlie) Blanka who has been warped in to a powerful beast. After realizing that Bison attempts to use Blanka to execute the hostages he hides in Blanka's incubation chamber and takes Bison by surprise. Unfortunately he is not able to prevent "red-alert" from going off and Cammy and T. Hawk end up in a tight spot. Luckily the attack party is not far behind and the battle begins.

While some of the heroes try to free the hostages , Ken wants to leave the battle now that the military is there. Ryu disagrees and goes back in to fight, but as Ken is leaving, he sees the monitors of the cameras spread out through Bison's base. He sees Sagat and Vega trying to ambush Ryu. Ken goes back in to help Ryu. Guile and Bison engage in a one-on-one fight. Guile seems to be winning, but then an automatic revival system brings Bison back to life and charges his body with great amounts of electromagnetism, allowing him to shoot lightning bolts and fly across the air. After taking a serious beating, Guile manages to kick Bison and sends him flying against his gigantic Monitor wall. As he crashes, there are severe electrical disturbances and the base is about to be destroyed. As the base sounds its last alarm, the heroes find and release the hostages just in time, and everyone evacuates.

Guile manages to talk to Dhalsim and Blanka one last time before he is forced to leave them behind; Blanka cannot return to human society changed like this, and Dhalsim decides not to leave Blanka to die alone and to pay for his own part in having done this to him. When the temple comes crashing down everyone thinks that Guile is dead, but then he appears from amongst the smoke.....however there is a further twist......

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