After the Master Emerald is stolen by none other than Rogue the Bat, Knuckles chases her through a warp ring on his own and ends up on an inter-zone treasure hunt for it with the help of the Chaotix, a team of detectives hoping to score a big payout for finding a big gemstone. Things quickly go awry as such a powerful artifact quickly attracts attention to Rogue and she is hunted down by all manner of thieves and bounty hunters. In one of these scuffles, something happens to the master emerald and it is once again shattered. Chaos, a primordial entity made of living water, is released from the shattered gemstone.
Meanwhile, Agent Stone looks for a way to revive Doctor Robotnik, who is in stasis after being defeated by Sonic in the end of the last movie. On his quest to find a means of doing so, he discovers a secret CIA database from the 70s filled with the research of Robotnik's grandfather, Gerald Robotnik. Gerald's research suggests that chaos power could be used as a means to preserve life, so he intends to use it to revive the doctor. He goes after a source of chaos energy he discovers in another zone, which happens to be the stolen master emerald. He activates a line of highly advanced robot soldiers Eggman had designed for the government, the E-Series, to claim the master emerald for himself.
