Sonic the Hedgehog 4: Episode I is set after the events of Sonic & Knuckles (1994). With the Death Egg destroyed, Sonic heads off to explore new territories alone. However, antagonist. Dr.Eggman has survived their last encounter, and has revisited and improved some of his creations from previous games, attempting to get rid of Sonic as the first part of his new grandiose scheme. Sonic's battle with Eggman culminates with Sonic defeating Eggman in his new base, the E.G.G. Station.

If all seven Chaos Emeralds are collected, a brief post-credits cutscene shows a silhouette of Metal Sonic, hinting at the next episode