Sonic, Tails, and Knuckles are walking through the canyon, discussing what Eggman might be up to. Then, Amy all of the sudden shows up and announces that she is in the race, too. Meanwhile, Tails is contemplating the symbol he saw on the thieves' board, and realizes that it is the mark of the Babylon Rogues. He explains about how in ancient times they were legendary thieves who lived in a floating island known as Babylon Garden. However, the island was cast into the depths of the earth and the Rogues were scattered. But according to legend, there was a treasure on the island. Also, he mentions that the Rogues are rumored to be Extreme Gear specialists. At this point, one of the Rogues shows up, a female named Wave the Swallow. She notices Tails holding Sonic's gear, the Blue Star, but after inspecting it, she deems it to be junk. Everyone is flabbergasted at this, and just as Tails was about to snap, the announcer announced that the second race was about to begin.
Splash Canyon takes place at daytime, and there is much water in this stage, such as rivers with strong currents and big waterfalls. There are more skill-type shortcuts in this level than the previous level, Metal City. In other words, there are three grinding rails for speed type. This is just the same as Metal City, but in this course, the rails are longer. Flight type's air rides are increased in number of hoops also. There are three linking air rides, unlike Metal City which only has two. For Power on the other hand, it only has one shortcut to smash through and not many obstacles just laying around, except for an icy part close to the end. This is nothing compared to Metal City, since Metal City has many obstacles for power type. This is Tails' first level in the game.