This is the second RPG set in the Super Mario universe, taking place after the events of Super Mario RPG. In this game, Mario's world is completely 3D, however; Mario and all other characters are now paper thin, making the game's art themed around paper.
Bowser has stolen the Star Rod from Star Haven, an item that can make all of his wishes come true. Using the power of the Star Rod, Bowser wishes to become invincible. He later crashes a party that Princess Peach is throwing at her castle by lifting it out of the ground and into the sky on top of his own castle. After coming face to face with Mario, Bowser easily defeats Mario and knocks him out of a window.
Mario then finds himself stranded on the ground out of reach. He soon discovers that his only chance to reclaim the Star Rod is to locate the seven Star Spirits of Star Haven who will grant him the ability to be stronger than Bowser. Unfortunately, they are all being held captive by Bowser's followers. Mario will have to travel throughout the Mushroom Kingdom, rescuing each Star Spirits so he can finally face Bowser.