Bowser's troops invaded using their airship fleet. They got into the castle with ease and quickly set up a perimeter. Still inside the castle, the King went to defend the castle, leaving the princess with her bodyguard Toad, to use the only remaining escape route.
After the Shy Guys were unable to locate and capture the princess, commander Bullet Bill went to find her. He was unable to do so before she escaped, but he engaged in a heated gunfight with Toad, likely because of personal reasons rather than the war. Eventually Toad was overwhelmed and shot, but he was able to set off multiple Bob-Ombs, setting off an explosion killing Bill, himself, and destroying part of the castle.
Meanwhile, Mario and Luigi, two plumbers turned soldiers were assigned to plunge toilets in the Palace as a "special mission". Shy Guys were able to disable Mario with a flash bang and kidnap Luigi, the latter being taken to the Hammer Brothers for a propaganda film. Mario was able to make it out of the castle.
Later, The Mushroom Kingdom was taken by Bowser. Toad was thought dead but still lived using a 1-up mushroom. The king was later killed by Wario.