Five thousand years ago, an unnamed heroic Pharaoh imprisoned Anubis, the Egyptian lord of the dead, after he tried to destroy the world by persuading the kings to play the mysterious Shadow Games. In the present day, Anubis' tomb is uncovered by archaeologists, amazed with his strongest and most valuable treasure: the Pyramid of Light. A devastating spiritual force unleashes from the relic and liberates the Egyptian sorcerer. Anubis, now free, intends to conclude his plan.
Meanwhile, the Battle City Finals have recently concluded, and young Yugi Muto has achieved international fame by defeating his arch-rival Seto Kaiba and obtaining the three legendary God Cards: Slifer the Sky Dragon, Obelisk the Tormentor, and the Winged Dragon of Ra. Kaiba, determined to defeat Yugi once and for all, turns to Pegasus, the creator of Duel Monsters, in order to obtain any new cards designed to defeat the almighty God Cards. Pegasus tells Kaiba that he has a card he is looking for, but will only give it to Kaiba if he can beat him in a duel. Kaiba defeats Pegasus and claims two cards, one of which was secretly planted by Anubis.
Meanwhile, Yugi and Tea go to the local museum where Anubis' corpse and the Pyramid of Light are on display.
It is then that the vengefully dark spirit of Anubis attacks the group, with Yugi having a vision of Anubis himself manipulating Kaiba and his closest friend the Pharaoh being hurt in a Shadow Game. He awakens to find Anubis and the Pyramid of Light missing. Kaiba's younger brother Mokuba arrives, and Yugi is taken to Kaiba's duel dome with his friends Joey and Tristan in pursuit. Kaiba arrogantly and ignorantly forces Yami Yugi into a duel, unaware that Anubis is manipulating him into using one of the two new cards, Pyramid of Light, which covers the field in a huge replica of the actual pyramid and destroys the God Cards. Yugi, Joey and Tristan are sucked into the pyramid while Mokuba flees the crumbling building.
Yugi, Joey, and Tristan awaken within the Millennium Puzzle, finding Anubis' tomb within. Anubis reveals that his monsters will destroy the modern world. Yami Yugi and Kaiba continue their duel, each blow to their in-game Life Points draining away their physical energy. To make matters worse, Kaiba's Deck Destruction Virus sends more than half of Yami's deck to the Graveyard, leaving him with barely any cards, and attacks from his Blue-Eyes Ultimate Dragon and Blue-Eyes Shining Dragon (his second new card), both with 4500 Attack Points, drop Yami's Life Points to 200. Pegasus figures out what is going on and arrives in a helicopter to rescue Téa, Solomon, and Mokuba. Téa sends her soul into the Millennium Puzzle to aid Yugi, Joey and Tristan. Yugi finds the Dagger of Fate within Anubis' tomb, and uses it to destroy the all-seeing eye, as predicted by the prophecy.
When Kaiba deviates from Anubis' plan and attempts to destroy the Pyramid of Light, Anubis materializes, casts him aside, and takes command of the duel. Yami, reunited with Yugi, destroys the Pyramid of Light card with Blue-Eyes Shining Dragon and then uses Kaiba's planned strategy to summon the God Cards and end the duel by destroying Anubis.
However, Anubis transforms into a monster and allows any monster to become real when summoned. This proves to be his undoing when Yugi and Yami summon Blue-Eyes Shining Dragon to beat Anubis with ease, ultimately destroying the Egyptian God of Death and Chaos for good. An injured Kaiba departs with Mokuba, with the promise to defeat Yugi next time they meet. Yugi thanks the spirit of Yami, and his three best friends for their strong enduring friendship which makes one a true winner.