How To Play CPU Tournaments In Mortal Kombat 4 N64

It's quite simple.
All you have to do is have only one controller plugged in as Player 2.
(Controller port 2. The second one on the left.)
For physical reference:
(0 * 0 0)
0 = unplugged.
* = plugged in.
Then you just press A on both player 1 and player 2 in the tournament menu and you're set!
All pressing A does is toggling the current character from Human to CPU and vice versa.
You can adjust the difficulty of each CPU by pressing down C.
The maximum CPU difficulty is Master II.
You can change each character with D-pad left and D-pad right.
You can move to different characters by pressing D-pad up and D-pad down.
I hope that this tutorial helps you in the future and be sure to have fun with your tournaments!

Don't forget, you can increase or decrease the number of fighters if you press D-pad right and D-pad left on the number of fighters option in the tournament setup menu. 
You can only have 4 or 8 fighters total.