Instructions
Travel to Route 25 in the Kanto region.
Talk to Bill's grandfather and show him a Staryu. He will give you a waterstone in order to evolve it. If you have already received this waterstone, you can receive another by going to the Pokeathlon Dome.
Travel to the Pokeathlon Dome, to the west of the National Park. If it is Monday, Tuesday, Wednesday or Friday, you can purchase a waterstone for 2,500 points.