The students of Canterlot High School prepare for the Friendship Games, a quadrennial sporting event held between their team, the Canterlot Wondercolts, and the Shadowbolts from Crystal Prep Academy. The games are intended to harmonize the two schools, but Canterlot High's students resent Crystal Prep for their poor sportsmanship and unbroken victory record. Principal Celestia and Vice Principal Luna warn Sunset Shimmer and her friends against using Equestrian magic in the competition, tasking Sunset with learning why the others achieve pony-like forms at random times. Meanwhile, Crystal Prep is attended by the human world's version of Twilight Sparkle, a school outcast who has been studying magical activity at Canterlot High as part of a special study program. Crystal Prep's principal, Abacus Cinch, threatens to end her special studies unless she participates in the games, to which Twilight reluctantly agrees.

Twilight meets Sunset and her friends at Canterlot High, guided by a pendant-like device she has built to detect and contain the magic energy around the school. Each of Sunset's friends demonstrate their friendship to Twilight and the Crystal Prep students, assuming their pony forms in the process. However, Twilight's pendant inadvertently drains them of their magic when she draws near. The pendant also seals the portal between the human world and Equestria, preventing Sunset from contacting the pony version of Twilight for advice, as well as giving her pet dog, Spike, the ability to speak. During one of the games' events, a three-event relay, Twilight accidentally drops her pendant and creates a rift to Equestria that brings through carnivorous plants. After dealing with the plants, Sunset reprimands Twilight for interfering with magic, driving her off in tears.

Cinch accuses Canterlot High of cheating because of these magical occurrences, and she and the Shadowbolts pressure Twilight into releasing the magic her pendant has collected to use it against the Wondercolts in the final event. The magic corrupts Twilight, who turns into a sinister demon-like creature and begins tearing open more rifts to Equestria, endangering the human world in the process. As the Wondercolts and Shadowbolts work together to save their classmates, Sunset realizes that the source of her friends' magic comes from acting true to themselves. She uses the pendant to combine her friends' magic and become a phoenix-like figure of herself, closing the rifts and returning Twilight to normal. Cinch threatens to report the incident to the school board, but abandons the idea upon realizing that her claims of magic use would destroy Crystal Prep's reputation. Twilight decides to transfer to Canterlot High, and Sunset and the others welcome her as a new friend.

In a pre-credits scene, the Twilight from Equestria emerges from the newly reactivated portal as her human friends are hanging out near it. She apologizes for her absence, then stares in shock at her human counterpart.