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In 1999, Dr. Maya Hansen is a biologist who is on the verge of creating a new type of bio-technology to fix the most crippling diseases and injuries. At a party, she meets and has a one-night stand with a drunken billionaire industrialist and playboy Tony Stark who has just humiliated Dr. Aldrich Killian and soundly rejected his proposal for him to join Advanced Ideas Mechanics (AIM).
In 2013, it is the aftermath of the Chitauri invasion of New York City. Tony Stark, billionaire industrialist and playboy turned superhero Iron Man is haunted by post traumatic stress disorder from his near brush with death in the depths of outer space. Pushing away his friends Jim Rhodes and his girlfriend Pepper Potts, Tony begins frantically building over two dozen iterations of his fabled Iron Man armor in desperate attempt to be more prepared for the next life or death fight.
Feeling more and more distant from Tony, Pepper continues to run Stark Industries and is charmed by Aldrich Killian who is interested in acquiring funding for AIM which is dedicated towards developing bio-technology. Meanwhile Jim Rhodes receives a cosmetic makeover of his War Machine Armor and is rebranded as the "Iron Patriot".
Then Tony's world is rocked to the core when his friend Happy Hogan is badly injured in a terrorist attack conducted by a mysterious figure known as the Mandarin. The Mandarin is the leader of the Ten Rings terrorist group which kidnapped Stark all those years ago and forced him to implant an arc reactor in his chest and transforming him into Iron Man.
Enraged, Tony issues a televised challenge, demanding that the Mandarin face him. Soon afterwards, his former one-night stand Dr. Maya Hansen makes contact with him and reveals that the Mandain is using her Extremis Technology to create super-terrorists.
But before Tony can act on her information, the Mandarin retaliates by using helicopter gunships to destroy his Malibu beachhouse, nearly killing him. Tony barely manages to escape in the Mark 42, an experimental Iron Man suit and tracks down the Ten Rings to Tennessee.
Tony crash lands in Tennessee after draining his arc reactor of available power and takes shelter in an abandoned garage. The garage however isn't abandoned but is the sanctuary for a lonely boy, Harley who reveals that everyone thinks that Tony is dead from the Mandarin's attack in Malibu. Deciding to keep it that way, Tony investigates Extremis undercover with Harley's aid and discovers that Maya's version was originally intended to cure wounded veterans from crippling injuries. Only the process is flawed and tended to kill most of the recipients while the survivors would gain superhuman abilities.
Leaving Harley and the Mark 42 behind, Tony contacts Rhodes and together they trace the Mandarin to Miami only to discover that there is no terrorist known as the Mandarin, merely a drunken British actor known as Trevor Slattery who acts as the front man for AIM and Aldrich Killian. Maya Hansen turns out to be a willing accomplice to Killian's schemes and reveals that in 1999, during their one-night stand; a drunken Tony looked at and solved one of her Extremis equations which enabled her to make it work. But she needs him to fix the flaws in the process and her earlier appearance was merely a feint, to push Tony in a specific direction.
Killian then kidnaps Potts and subjects her to Extremis as leverage for Tony to fix the process, thus saving her. Tony manages to convince Maya that her good intentions for the end results of Extremis in no way absolves her of the horrific crimes she has committed to see it to its fruition. Demanding to know what happened to the benevolent scientist who wanted to help people all those years ago, Maya balks and is promptly killed by Killian. Reluctantly, Tony gives up the upgraded Extremis to save Pepper.
Luring the Iron Patriot into a trap, Killian removes the armor and masquerades as the armored hero so that he can gain unrestricted access to Air Force One and the President. Meanwhile, Tony is able to free himself and reunited with Rhodes, they send the Harley-repaired Mark 42 via remote control to intervene. Killian is able to kidnap the President and cripple Air Force One although Tony is able to save dozens of people.
Rhodes and Tony trace Killian to the Port of Miami where he intends to execute the President, blaming it on the Mandarin while his accomplice and puppet, the Vice President will assume the office in exchange for Killian curing his disabled daughter via Extremis. Although both Rhodes and Tony at first appear to outnumbered and outgunned by Extremis-powered mercenaries, Tony is able to even the odds by using his artificial intelligence computer, JARVIS to remotely operate all of his Iron Man armor iterations in combat. While Rhodes manages to save the President, Tony engages Killian in battle but Pepper falls to her death as a result. A horrified Tony is badly losing when Pepper reappears, having survived the fatal fall thanks to Extremis and slays Killian.
Afterwards, Tony has JARVIS self-destruct all of his Iron Man suits to show that he doesn't need them anymore to feel safe and devises a process to safely remove the shrapnel embedded in him and his Arc reactor as well even as Rhodes arrests a befuddled Slattery and the Vice President for their collaboration in Killian's crimes. In Tennessee, Harley wakes up to discover a massively refurbished garage workshop and a thank you note from Tony. In Malibu, Tony newly released from the hospital, examines the shattered ruins of his home and gathers up some mementos to take with him before pitching his arc reactor into the ocean, musing that he doesn't need it anymore to be Iron Man.
- Robert Downey, Jr. as Iron Man
- Gwyneth Paltrow as Pepper Potts
- Don Cheadle as Iron Patriot
- Guy Pearce as Aldrich Killian
- Rebecca Hall as Dr. Maya Hansen
- Stephanie Szostak as Brandt
- James Badge Dale as Savin
- Jon Favreau as Happy Hogan
- Ben Kingsley as Trevor Slattery
- Ty Simpkins as Harley Keener
- Paul Bettany as J.A.R.V.I.S.
- Ashley Hamilton as Taggart
- William Sadler as President Ellis
- Miguel Ferrer as Vice President Rodriguez
- Adam Pally as Gary
- Shaun Toub as Yinsen
- Dale Dickey as Mrs. Davis
- Wang Xueqi as Dr. Wu
- Mark Ruffalo as Dr. Bruce Banner
- Noa Lindberg as Michele Cusick