Genius, billionaire, and playboy Tony Stark, who has inherited the
defense contractor Stark Industries from his father, is in war-torn
Afghanistan with his friend and military liaison, Lieutenant Colonel
James Rhodes to demonstrate the new "Jericho" missile.
The convoy is ambushed and Stark is critically wounded by one of his
own rocket propelled grenades. He is captured and imprisoned in a cave
by the terrorist group the Ten Rings, and an electromagnet is grafted
into his chest by fellow captive Yinsen to keep the shrapnel shell
shards that wounded him from reaching his heart and killing him. Ten
Rings leader Raza offers Stark freedom in exchange for building a
Jericho missile for the group, but Tony and Yinsen agree Raza will not
keep his word.
Stark and Yinsen secretly build a powerful electric generator called an
arc reactor to power Stark's electromagnet and a suit of powered armor
to aid in their escape. Although they keep the suit hidden almost to
completion, the Ten Rings attack the workshop when they discover their
intentions. Yinsen sacrifices himself to divert them while the suit
powers up. The armored Stark battles his way out of the cave to find the
dying Yinsen, then in anger burns the Ten Rings weapons and flies away,
crashing in the desert and destroying the suit. After being rescued by
Rhodes, Stark returns home and announces that his company will no longer
manufacture weapons. Obadiah Stane,
his father's old partner and the company's manager, advises Stark that
this may ruin Stark Industries and his father's legacy. In his home
workshop, Stark builds an improved version of his suit, as well as a
more powerful arc reactor for his chest. Personal assistant Pepper Potts
places the original reactor inside a small glass showcase. Though Stane
requests details, Stark keeps his work to himself.
At a charity event held by Stark Industries, reporter Christine Everhart
informs Stark that his company's weapons, including the Jericho, were
recently delivered to the Ten Rings and are being used to attack
Yinsen's home village, Gulmira. Stark also learns Stane is trying to
replace him as head of the company. Enraged by these revelations, Stark
dons his new armor and flies to Afghanistan, where he saves Yinsen's
village. While flying home, Stark is shot at by two F-22 Raptor
fighter jets. He reveals his secret identity to Rhodes over the phone
in an attempt to end the attack. Meanwhile, the Ten Rings gather the
pieces of Stark's prototype suit and meet with Stane, who subdues Raza
with a sonic device and has the rest of the group killed. Stane has a
new suit reverse engineered from the wreckage. Seeking to find any other
weapons delivered to the Ten Rings, Stark sends Pepper to hack
into the company computer system from Stane's office. She discovers
Stane has been supplying the terrorists and hired the Ten Rings to kill
Stark, but the group reneged. Potts meets with Agent Phil Coulson of
S.H.I.E.L.D., a counter-terrorism agency, to inform him of Stane's
activities.
Stane's scientists cannot duplicate Stark's arc reactor, so Stane
ambushes Stark at his home and takes his. Stark manages to get to his
original reactor to replace the taken one. Potts and several
S.H.I.E.L.D. agents attempt to arrest Stane, but he dons his suit and
attacks them. Stark fights Stane, but is outmatched without his new
reactor to run his suit at full capacity. The fight carries Stark and
Stane to the top of the Stark Industries building, and Stark instructs
Potts to overload the large arc reactor powering the building. This
unleashes a massive electrical surge that causes Stane and his armor to
fall into the exploding reactor, killing him. The next day, at a press
conference, Stark admits to being the superhero the press has dubbed
"Iron Man".
In a post-credits scene, S.H.I.E.L.D. Director Nick Fury
visits Stark at home, telling him that Iron Man is not "the only
superhero in the world", and explaining that he wants to discuss the "Avengers Initiative".
