Dr Robotnik is missing, presumed dead after his second Death Egg fell out of orbit. While the authorities are searching for the crash site, the Kintobor Computer has it that the Death Egg isn't on Mobius and hit something in its return to the planet. Amy is skeptical that it could have hit the legendary Floating Island, but Sonic and Tails are searching the skies anyway in the Bi-plane and quickly find the island. After calling Porker back at base, they land and are quickly attacked by a totem pole spitting out arrows. Sonic breaks through the pole, but soon finds himself going over the edge of the island. Rescued by Tails and entering a tunnel a little way below the ledge, they soon return to the surface where they encounter a new Badnik: a Pointdexter, who defends itself by getting its spikes up just in time. Sonic is only able to avoid getting himself killed by using a new forcefield technique. Robotnik arrives on the scene, and Sonic launches into an attack, only to be knocked away by a powerful punch, as the dictator reveals his new bodyguard: the Floating Island's guardian, Knuckles the Echidna.
Sonic recovers, and Robotnik reveals that he has been lying to Knuckles, presenting himself as a victim, having had the Chaos Emeralds stolen, and leading the guardian to believe Sonic is here to steal the Emeralds he is guarding. Knuckles, unfortunately, has swallowed every one of Robotnik's lies and proceeds to attack Sonic again. This time Sonic begins fighting back, after ordering Tails to leave, trying to compare his speed skills to Knuckles' rock breaking punches. The echidna is knocked flying but quickly burrows underground, Sonic following. After a violent, unseen skirmish, Knuckles is knocked back up to the surface, and the pair seem set to carry on fighting. Tails returns in the bi-plane and proceeds to trap Robotnik in a net. Knuckles reasons that Tails will bring Robotnik back if Sonic can be caught, but the hedgehog quickly zips out of harm's way and leaps onto his usual spot atop the bi-plane's wings. As the heroes start their journey home, both Knuckles and the captured Robotnik swear revenge, but Sonic muses upon Knuckles' strength, and bets he hasn't seen the last of him...
- Robotnik's shoulders change colour from grey to red between parts 1 and 2.
- Amy may or not be referencing Looney Tunes with her statement of 'aaa...shadapp!'