Ryu and Muay Thai champion Sagat engage in a heated battle until Ryu severely scars Sagat across the chest using the Shoryuken. Enraged, Sagat charges at Ryu, but Ryu defeats him using the Hadouken, and Sagat vows revenge.
Several years later, following the assassination of a Justice Minister by Cammy White, a hypnotized MI6 agent, Interpol agent Chun-Li suggests that they join forces with the United States Military to destroy the enigmatic crime syndicate Shadowlaw. Captain Guile, who seeks revenge against Shadowlaw's leader, M. Bison, for the death of his best friend Charlie, initially refuses, but eventually relents after Chun-Li tells him that Bison killed her father years earlier and she also seeks revenge, but knows that her duty comes first. At the Shadowlaw base, Bison, along with his bodyguards Balrog, Vega, and Sagat, orders a worldwide manhunt for Ryu, determined to induct him into his organization, and sends out monitor cyborgs to find more valuable martial artists for their cause. However, Ryu, who is traveling the world to seek out worthy challengers, such as Fei Long, Dhalsim, and E. Honda, remains undetected due to suppressing his Ki.