Mysterio began a feud with King Booker after Booker won a battle royal to become the number one contender for the World Heavyweight Championship. Booker attacked Mysterio from behind backstage with the help of Booker's wife Queen Sharmell. The next week on "SmackDown!", Mysterio gained revenge by attacking Booker and his "court". This rivalry continued for several weeks and saw Mysterio defeating Booker's court member William Regal on an episode of "SmackDown!", moments before attacking the challenger and hitting him with a 619 around the steel post. On July 23 at The Great American Bash, Mysterio lost the World Heavyweight Championship to King Booker after Chavo interfered in the match and turned on Mysterio, hitting him with a steel chair. Guerrero cost Mysterio his rematch the following week. This culminated in a match at SummerSlam where Mysterio lost to Guerrero after Vickie Guerrero tried to stop both men from fighting, but accidentally knocked Mysterio off the top turnbuckle. Vickie then along with Chavo turned on Mysterio after she hit him in the back with a steel chair and gave him an injury, thus, siding with Guerrero. Mysterio then defeated Guerrero in a Falls Count Anywhere match at No Mercy. Subsequently, Guerrero challenged Mysterio to an "I quit" match for the October 20 edition of "SmackDown!". In that match (which Mysterio lost), Guerrero injured Mysterio's knee, using the match to write Mysterio out of the storyline for a while to get knee surgery.