The main event from the SmackDown! brand was a rematch from WrestleMania X8 between Hulk Hogan and The Rock, which Rock won by pinfall after Sylvain Grenier, the referee of the match, allowed Rock to hit Hogan with a steel chair, which proceeded to a Rock Bottom. The main event from the Raw brand was a World Heavyweight Championship match between Triple H and Scott Steiner, which Triple H won via pinfall, after he hit Steiner with the championship belt and a Pedigree. The main match on the undercard from Raw was the encounter of Steve Austin and Eric Bischoff, which Austin won via pinfall after three consecutive Stone Cold Stunners. The main match on the undercard from SmackDown! was a six-man tag team match between Team Angle (Kurt Angle, Charlie Haas, and Shelton Benjamin) and the team of Brock Lesnar, Edge, and Chris Benoit, where Edge was unable to participate in the match due to injury. The match, however, was won by Lesnar and Benoit via submission, after Benoit forced Haas to submit to the Crippler Crossface.
On the January 23 episode of SmackDown!, SmackDown! General Manager Stephanie McMahon announced the return of Hulk Hogan to the WWE. During the returning segment of Hogan, the WWE Chairman, Vince McMahon, came down to the ring to insult Hogan, resulting in Hogan challenging McMahon into a match, however, Hogan then proceeded to attack McMahon. The attack led to McMahon accepting Hogan's challenge, he however, instead booked a rematch from WrestleMania X8 between Hogan and his representative, The Rock at No Way Out, the following week on SmackDown!; thus the beginning of the Rock-Hogan feud on the SmackDown! brand. During the weeks leading to No Way Out, both Rock and Hogan cut promos on who was the better wrestler. The feud intensified on the February 20, and final episode of SmackDown! before No Way Out, however, where, during a segment, Rock attempted to shake Hogan's hand, and then spat water into Hogan's face.
At the Royal Rumble, Kurt Angle successfully defended the WWE Championship against Chris Benoit while Lesnar won the Royal Rumble match to earn himself a WWE title shot at WrestleMania XIX by last eliminating The Undertaker. On the January 23 episode of SmackDown!, Kurt Angle confronted his protégés, Team Angle (Charlie Haas and Shelton Benjamin), about their losses that night, as Benjamin was pinned by Edge, while Haas was pinned by Chris Benoit. The following week on SmackDown!, Haas and Benjamin were booked in a tag team match against Edge and Benoit. During the match Angle interfered in Haas and Benjamin's behalf, which led them to pinning Edge and Benoit for the win. Haas and Benjamin would then defeat the then-reigning Tag Team Champions, Los Guerreros, to win the Tag Team Championship on the February 6 episode of SmackDown!. The following week on SmackDown!, General Manager Stephanie McMahon announced a match between Team Angle (Angle, Haas, and Benjamin) against the team of Lesnar, Benoit, and Edge at No Way Out, thus the official beginning of the Team Angle-Team Lesnar feud. On the February 20, and final episode of SmackDown! before No Way Out, Angle was booked in a match against Brock Lesnar, however, before the match started, Angle stated that Lesnar had to defeat Haas and Benjamin before he could wrestle Angle, which Lesnar was able to do. As Lesnar then wrestled Angle, Paul Heyman, who was at ringside, interfered in the match and hit Lesnar with a steel chair, causing Angle to lose by disqualification.
On the January 20 episode of Raw, Eric Bischoff made an announcement about how Stone Cold Steve Austin walked out on Vince McMahon during the summer of 2002 with no explanation and that he would like to give Steve Austin an opportunity to give his side of the story. Bischoff also invited Steve Austin to make an appearance at next month's No Way Out. The following week, Bischoff stated that Austin has agreed to tell his story in the Raw magazine. On the February 3 episode of Raw, Bischoff headed to Texas, to sign Austin to the Raw brand. But, he was unsuccessful in doing so, as he couldn't locate Austin anywhere. The following week on Raw, Bischoff (kayfabe) fired Jim Ross, after Bischoff stated that it was Ross' fault that Austin hasn't signed yet to the brand. Vince McMahon, who the previous week stated he would fire Bischoff and Chief Morley for the way they were running Raw the last couple of weeks, asked Bischoff if he'd signed Austin yet, which prompted Bischoff to say No. J.R. informed McMahon that Austin would be at No Way Out, which led to McMahon booking a match between Bischoff and Austin for the pay-per-view.