The plot is not canonical.
It has a sequel entitled Tekken 2: Mishima Family Values.
Heihachi is looking for the "Toshin Stones" which would give him great power. His men promise him that they are about to find them, but cannot bring it themselves. Heihachi is angered and kills the one of his man.
Heihachi and his son Kazuya travel to Mexico to supervise the search for the "Toshin stones". Heihachi leads Kazuya to the top of a cliff so they can practice. Kazuya seems pretty sure of himself, but Heihachi gains the upper hand and Kazuya, furious with his father, misses his attack and falls off the top of the cliff.
Heihachi doesn't care what happened to Kazuya. He asks his employees to search for his body, but they find nothing. Heihachi thinks his son is dead and, indifferent, returns to Japan. Kazuya survived. His body washed up near a Mexican village, where he was picked up and cared for by Bernard Chang's wife, Julia, who lives with her daughter Michelle. He remains in critical condition for weeks, but Michelle has the idea of using one of the "Toshin's Stones" to save him.
Kazuya wakes up some time later. He learns how the "Toshin Stone" played a role in his survival. He attacks the Chang, steals the stone and runs away.
In the present, Marshall Law, a waiter at a restaurant in Los Angeles, intends to save up to open his own restaurant. After an accident involving Paul, the two fighters clash. Law wants to end the fight, but Paul refuses. They will finally postpone the fight to the upcoming tournament.
In Ireland, the two murderous and rival sisters Nina and Anna Williams are forced to work together to participate in the tournament and put an end to Heihachi's rise to power. For his part, King asks God to forgive his future participation in the tournament, the only way for him to find the money necessary to save his orphanage. Jun Kazama, who represents a wildlife protection agency, works with Lei Wulong. They don't know that their discussion about Heihachi's arrest is being listened to by his new head of security: Bruce Irvin. Michelle Chang finds out that her father was killed by Heihachi and enters the tournament for revenge. Finally Lee Chaolan, whom Heihachi adopted shortly after Kazuya's supposed death, shows his father photos indicating that Kazuya is alive. Heihachi, however, refuses to believe it.
The next day, Kazuya trains in a forest in Japan. By cutting down trees, he angered the Manji clan. Kazuya fights the clan member Muru. Then the leader, Yoshimitsu, steps in to challenge Kazuya. During the clash, Kazuya manages to slap the ninja's sword. He knocks the sword down but it is immediately stolen by Kunimitsu.