A martial arts master agrees to teach karate to a bullied teenager.
Ostracised villain John Kreese attempts to gain revenge on Daniel and Miyagi, with the help of a Vietnam War comrade, the wealthy owner of a toxic waste disposal business.
Daniel accompanies his mentor, Mr. Miyagi, to Miyagi's childhood home in Okinawa. Miyagi visits his dying father and confronts his old rival, while Daniel falls in love and inadvertently makes a new rival of his own.