- John Barrowman as Iron Man
- David Ramsey as James "Rhodey" Rhodes
- Tobin Bell as Edwin Jarvis
- Chow Yun-Fat as Mandarin/Wong-Chu
- Jessica Chastain as Pepper Potts
- Bryan Cranston as Howard Stark
- Channing Tatum as Michael O'Brien/Guardsman
- James Hong as Ho Yinsen
- Kevin James as Happy Hogan
- Anna Paquin as S.H.I.E.L.D. Agent Pia Marina
- Jeremy Irons voices Fin Fang Foom
Tony Stark is meeting with the head of FujikawaTech when the meeting is interrupted by the Tong who blow the building up. The FujikawaTech CEO is killed and shrapnel gets lodged in Tony's heart. He is captured while Fujikawa's body is burned. Tony wakes up inside the Tong's hidden lair where he meets fellow prisoner Ho Yinsen. Yinsen and Stark are led into a room where they meet with the Tong's leader, Wong-Chu. He demands that they buid weapons for him. They agree, but instead they build suits of armor for escape.
After a month they attempt to escape, and Yinsen is shot to death but Tony survives. Wong-Chu is severely injured, though. Tony gets to the nearest town, and phones his friend James Rhodes, who, the next day, comes and gets him along with a group of Air Force officers in a helicopter. Tony gets home, and all of his friends and family, even his estranged father, show up. Tony decides to upgrade his suit and become a hero for fame, Iron Man. We then see a montage of him stopping crooksover the next few months.
We then see Wong-Chu, who is in the desert. He is slowly dying, his base was destroyed, and most of his men are dead. He then hears a voice that says "Wong-Chu, I see great potential for you." He is then sucked through a portal.He lands 20 miles below the surface in a cavern directly beneath his former base. A shadowy figure bathes him in white light and he now discovers that his robes are no longer tattered and now lool like those of royalty, his wounds are gone, and he has ten rings on his finger. The creature says "Do not fail me, my Mandarin."
The Mandarin then sees Iron Man on TV and realizes he is Tony. He creates a giant robot called Ultimo with one of his rings and sends it to attack New York. The monster attacks the city, and Iron Man tries to defeat it, although he is being cocky. However, after he sees Ultimo kill his father, he becomes more serious and defeats Ultimo. Unbeknownst to Iron Man, this was a distraction so that Mandarin could download the blueprints for the Iron Man suits.
Meanwhile, Marine veteran and leg amputee Michael O'Brien discovers that his brother, a firefighter named Kevin, was killed in Iron Man's fight. Mandarin approaches Kevin and offers him revenge. He is given a armored suit and decides that since he is "guarding the innocent" from "menaces" like Iron Man, he will become Guardsman.
A few days later, Tony is examining Ultimo's husk and discovers traces of magical radiation. He remembers the legend of the Makluan rings that his father told him as a kid. Tony realizes that the magic from the legend is the same type that was on Ultimo's body. He realizes that if the rings are real, the world is in great danger. He does a scan for magic in the area, but the scan is interrupted by an EMP. He runs to the nearest building unaffected by the blast, and discovers that the Guardsman wants Iron Man to reveal himself, or he will activate five bombs in the city. He finds Guardsman and reveals himself, and Iron Man beats him severely, and ties him up and leaves to get cover.
Tony escapes and tells Rhodey to bring him his new suit, which he does. Tony finds Guardsman and they fight in the sky. Tony explains that Ultimo runs on the power of the Makluan rings and that it is the fault of whoever has the rings. Guardsman realizes that this is Mandarin. He tells Tony that the bombs are deactivated by a control in his suit. He attempts to disarm the bombs, but Mandarin taks control of the suit nd he can't move. He says the only way to stop the bombs is if the suit is destroyed, and he forces Tony to destroy him. He reluctantly does, and the bombs are stopped. Mandarin sees this and decides that he must do things on his own.
He captures Pepper, Rhodey, Jarvis, and Happy and tells Iron Man to come and meet him. Mandarin says that one will die anyway, but Tony can sacrifice himself for the others. Tony surrenders and takes off his suit. Just as Mandaerin is about to kill him though, Pepper kicks Mandarin in the face, causing the energy beam to misfire and hit the light switch. The building goes into complete darkness and in the frenzy, Iron Man defeats Mandarin. The power comes back on in the room, and Mandarin is returned to his withered appearance. SHIELD Agent Pia Marina comes to arrest Mandarin but he commits suicide. In the aftermath, Tony stays Iron Man and dedicates most of his time to building suits. At the end of the movie, we see Rhodey come and get Tony out of his lab. On the way out, Rhodey sees the War Machine suit and smiles.
In a post-credits scene, the "man" that gave Mandarin the rings is revealed to bee Fin Fang Foom.