Sakura Kasugano is a schoolgirl who loves street fighting. Though she took up fighting to emulate her hero Ryu, she has to settle for being mentored by Dan Hibiki,a martial artist of dubious prowess. While Dan isn't the most effective warrior to ever live, he does have a solid grasp of some of the principles and techniques of martial arts(including chi manipulation), and Sakura is able to put what he teaches her to good use.
Sakura's battles against local thugs and brawlers soon catch the eye of Karin Kanzuki, the conceited daughter of a wealthy family and a consummate martial artist herself. Following their bout Karin enters into a rivalry with Sakura, which sees her start an impromptu tournament on the streets of Sakura's hometown, bringing in fighters from around the world.