The storyline involves many colorful characters. Jim himself (a character designed by Doug TenNapel) was at first an ordinary Earth earthworm who did very earthworm-like things such as flee from crows and eat dirt. One day, in the space above Earth, the evil Psy-Crow had cornered a rebel spaceship pilot who had stolen an "Ultra-high-tech-indestructible-super-space-cyber-suit" built by Professor Monkey-For-A-Head. The suit had been commissioned by the evil Queen Pulsating, Bloated, Festering, Sweaty, Pus-filled, Malformed, Slug-for-a-Butt so that she could further conquer the galaxy. In the ensuing space fight, the suit was dropped to Earth, and fell on Jim. By a stroke of luck, Jim managed to land within the collar of the suit, and it ended up mutating him into the large and intelligent (at least by earthworm standards) superhero he is today.
Jim overhears Psy-Crow talking to Queen Slug-for-a-Butt about the scorch marks left by the suit and her plans for her sister, Princess What's-Her-Name. Jim thus sets out to rescue the princess, fighting many enemies along the way, such as Major Mucus, Chuck and Fifi, Evil the Cat and Bob the Killer Goldfish, although none of this is apparent throughout the game