This version of the Shredder is the Earth's ruler, making his headquarters in the Channel 6 building in Shredderville. He remains holed up in his office throughout the episode, using loudspeakers to brainwash the population into believing that evil mutants are the cause of the general state of disrepair in the city.
When the turtles discover the Technodrome, which is also deteriorating, is sitting in the city, they find a way inside in order to confront Krang. They find that Krang blames his situation on Shredder as well, because the Technodrome's power generator is overheating due to Shredder diverting all the coolants for his own use at his headquarters.
The turtles return to the Channel 6 building and persuade April and Irma into taking them to Shredder's office. Once inside, they find that Shredder is miserable as he tells them "You think being emperor of the world is easy? Oh, it's giving me an ulcer."
Shredder proceeds to beg them to take him with them back to their world, where he won't have to rule. Just then the building shakes and an entire side of it collapses. Shredder runs away, shouting "That's it, I abdicate the throne!"
The turtles do not chase him because the floor falls out from under their feet. Shredder is not seen again as the entire Shredderville visit proves to have been a shared dream by all four of the turtles.