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The Cerulean Cave is filled with the strongest wild Pokémon. It's quite an interesting place to navigate, because it feels like you'll never reach where you want to go. After going through mazes several times, you'll find Mewtwo between two rocks.
CAUTION! Do NOT use the Master Ball if you want to capture Suicune/Raikou/Entei later in the game. Otherwise, go ahead and use the Master Ball (hopefully that wasn't used already). Mewtwo is extremely difficult to catch without the Master Ball, but that doesn't mean it is impossible.
- Try to paralyze Mewtwo with an Electric type or a fast Dragonite/Dragonair before Mewtwo uses Safeguard, then weaken Mewtwo down to red health.
- Mewtwo will use Recover when it's weakened (it makes for quite a hassle as it has 10 PP).
- When you finally manage to get Mewtwo's health down to red, throw Ultra Balls. Bringing a minimum of 50 is recommended.
- After a lot of turns have past, start using Timer Balls.
After catching Mewtwo, you can explore Kanto until meeting a Legendary Beast, or you can head to Seven Island.
Capturing a Legendary Beast
After defeating the Elite Four for the first time, one of the Legendary Beasts will be available for capture, running in the wild grass somewhere in Kanto. Which of the Beasts you'll be able to capture is determined by your starter Pokemon. If you chose Bulbasaur, Entei will roam Kanto. If you chose Charmander, Suicune will be available. If you chose Squirtle, Raikou is your challenge.
- To find the Beast quickly, head to Vermillion City, and buy a good number of Super Repels. Place a Pokemon Level 40 in the first position and head East towards Route 12, past Diglett's Cave. Activate the Super Repel and run through the grass. If you do not find the Beast, head into Diglett's Cave and quickly back into Route 12. This will reset the Beast's position on the map. Repeat as necessary until you meet the Beast!
- The main problem lies on that the Legendary Beasts are bugged. If you fail to capture the Beast on the first time you meet, it will run away, NEVER to be seen again! Thus, I hope you kept that Master Ball!
Congratulations! You've acquired two legendary Pokemon!