During a business trip to Afghanistan to demonstrate Stark Industries' new weapon, Tony Stark is suddenly kidnapped by the terrorist group gang Ten Rings, ordering him to build a missile for them. Instead, he and fellow captive Yinsen secretly build a powered suit of armor. During this time, Yinsen also acts as Stark's mentor, showing him humility and telling him of the horrors his company has caused, making Stark reconsider his life. Armed with a flamethrower and missiles, Stark uses the armor to destroy the terrorists' weapons stockpile and escape their camp, but Yinsen is killed, and the armor is destroyed. Upon being picked up by the Air Force and returning to the United States, Stark declares that his company will no longer manufacture weapons, a move disapproved by his business partner Obadiah Stane.
With the help of his personal A.I. J.A.R.V.I.S., Stark develops an updated and more powerful version of his armor, adding Stark Industries' new repulsor technology and flight capability. While testing his new suit at Stark Industries, Tony uses it to fend off an attack by the Maggia crime family, who have been providing weapons for the Ten Rings. Using his new Mark III "Iron Man" armor, Stark destroys the Maggia's weapons stockpiles and an armored hovercraft. On the way home, he establishes contact with his friend Lieutenant Colonel James Rhodes and reveals his identity as Iron Man.
Tony after these events goes back to his place, where Pepper Potts realizes what he has been doing. Rhodes also agrees to assists Stark with these desires, informing him of a weapons transport in Afghanistan. Stark follows the transport, destroying the weapons, defeating the villain Whiplash, a former Stark Industries worker, in the process, before proceeding to the Maggia's compound to destroy the rest of the weapons, and after infiltrating the mansion, he confronts Madame Masque, who is killed when a wall falls on her. Stark soon destroys the Maggia's flying fortress, ending the threat.