Mr. Miyagi and Daniel take a trip to Okinawa to visit Mr. Miyagi’s dying father. After arriving Mr. Miyagi finds he still has feelings for an old love. This stirs up trouble with an old rival who he originally left Okinawa to avoid. In the mean time, Daniel encounters a new love and also makes some enemies.

Kreese, his life in tatters after his karate school was defeated by Daniel and Mr. Miyagi, visits Terry, a friend from Vietnam. Terry is a ruthless business man and a martial arts expert, and he vows to help Kreese take revenge on Daniel and Mr. Miyagi.

Hassled by the school bullies, Daniel LaRusso has his share of adolescent woes. Luckily, his apartment building houses a resident martial arts master: Kesuke Miyagi, who agrees to train Daniel … and ends up teaching him much more than self-defense. Armed with newfound confidence, skill and wisdom, Daniel ultimately faces off against his tormentors in this hugely popular classic underdog tale.