Sonic the Hedgehog Spinball is one of the few games in the Sonic franchise set in the universe of the animated series Sonic the Hedgehog. The evil scientist Doctor Robotnik has built a fortress on top of a volcano to transform the animals of planet Mobius into robot slaves. The volcano's magma fuels the fortress and the pinball machine-like defense systems. The volcano is kept in stable condition with Chaos Emeralds.

Sonic the Hedgehog and his friend Tails mount an aerial assault on the fortress. Sonic is knocked into the waters that surround the volcano, but surfaces in the caves below the fortress. He infiltrates the defenses, absconds with the Chaos Emeralds, and frees the animals. Without the Chaos Emeralds, an eruption begins to destroy the fortress. Sonic destroys Robotnik's escape ship. Tails rescues Sonic, while Robotnik falls into the volcano, which sinks into the ocean and explodes.