For several unrelenting days, Captain Dorai is hunting down a powerful underground drug ring known as "Ashura". Dorai has already arrested several Ashura members. Now, the Ashura are going to act revenge on Dorai. By doing so, they intend to kidnap his daughter, Chun-Li. One day after school, Chun-Li was spotted by a clown who tried to apprehend her, but, then fought back. Ryu and Ken soon joined to stop the criminals. The Ashura then tried to finish off Dorai at his own home, who was unknowingly waiting for them. Then, Ryu, Ken, Chun-Li and Fei-Long came to help him. They soon realize that some of the criminals are using a dangerous fighting art called "Muay Thai". But, they found a weak spot and finished off the Ashura, for now. Then, Ryu and Ken head for the southeast to discover more about Muay Thai.

After Ryu defeated several prisoners, he is faced with a bug strong prisoner. He is Sagat, the former Muay Thai kick boxing champion. Sagat was not happy that Ryu defeated the prisoners. So, Ryu and Sagat fought. At first, Sagat had Ryu pinned down, then Ryu retaliated. Afgter the fight, Sagat tells Ryu on how he had it all, and why he was in prison, he as well as Ryu was set up by the Ashura. Meanwhile ,Ken finally finds the person who set up Ryu with the drugs. Then, Ryu was free from prison. Now, he helps Ken to defeat the Ashura.