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The main feud heading into WrestleMania was between Hulk Hogan and Randy Savage, with the two battling over the WWF Championship. Hogan and Savage first crossed paths on the October 3, 1987 edition of Saturday Night's Main Event, Savage got a shot at The Honky Tonk Man's Intercontinental Championship but was attacked by the Hart Foundation; Hogan came to Savage's rescue, thus solidifying Savage's face turn. At WrestleMania IV in March 1988, Savage defeated Ted DiBiase in a tournament final to win the vacant WWF Championship with help from Hogan and Hogan soon after came into the ring to congratulate Savage. Soon after, the duo formed a tag team known as The Mega Powers. They feuded with many heel tag teams throughout the entire year and were a successful team. Mega Powers ruled and dominated the WWF for 16 months. However, their domination and tag team began to breakup in early 1989 as tensions slowly began to build between the two. This all began on the January 7, 1989 edition of Saturday Night's Main Event, when Hogan was mercilessly beaten by The Twin Towers after his match with Akeem. Savage came out and cleared the ring with a steel chair. Elizabeth took Hogan to the backstage which angered Savage. He thought that he was a third wheel and this was the beginning of the breakup of Mega Powers as Savage was angry that why his wife Miss Elizabeth was used by Hogan as his manager. He confronted her about the issue but she took Hogan to the backstage.Problems increased further in the Royal Rumble match where Hogan accidentally eliminated Savage as he was trying to eliminate Bad News Brown. On February 3 at The Main Event, Hogan and Savage faced The Twin Towers (Akeem and The Big Boss Man) in a tag team match that would set up the Mega Powers' breakup. During a key point in the match, Savage was thrown out of the ring onto Elizabeth, knocking her unconscious. Hogan carried her to the back, leaving Savage to fend for himself in the ring against the much larger Akeem and Big Bossman; Hogan eventually returned, but Savage slapped him in the face and took the belt in his hand and turned heel by abandoning Hogan. Despite this, Hogan managed to pick up the win. After Savage attacked Hogan in the medical area of the arena (to seal Savage's heel turn), Hogan challenged Savage to a match for the WWF Championship at WrestleMania, which Savage accepted.
The second main feud heading into WrestleMania was between Rick Rude and The Ultimate Warrior over the WWF Intercontinental Championship. Rude and Warrior were booked to face each other in a "Super Posedown" at Royal Rumble in January 1989. The winner had to be decided by a fan reaction, where Warrior won the posedown. After the posedown, a furious and angry Rude attacked Warrior.This led to a feud between the two and an Intercontinental title match at WrestleMania.
The other main match on the undercard was Demolition (Ax and Smash) versus Powers of Pain (The Barbarian and The Warlord) and Mr. Fuji in a handicap match for the WWF Tag Team Championship. Demolition was a dominant heel tag team since its debut in early 1987. They defeated Strike Force (Tito Santana and Rick Martel) for the titles at WrestleMania IV. They had a successful feud with The Hart Foundation during their early reign. In the summer of 1988, a powerhouse babyface tag team Powers of Pain debuted and feuded with Demolition over the tag titles. At Survivor Series, Demolition's manager Mr. Fuji turned on them after causing them to lose their Survivor Series match, culminating in a double turn as Demolition turned babyfaces and Powers of Pain turned heels. Powers of Pain made Mr. Fuji their manager, leading to their WrestleMania encounter with Demolition for the tag titles in a 3-on-2 handicap match.
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