After Daniel LaRusso’s karate tournament win, his mentor, Mr. Miyagi, intervenes when Kreese, a rival sensei, belittles and attacks his pupil, Johnny, for losing the match to Daniel. Miyagi rescues the boy, then he gracefully steps aside at the last minute as Kreese jams both hands through a car window. Miyagi pulls Kreese down on his knees, and pretends to strike a blow. It is a bluff, and Miyagi tweaks the man’s nose instead. Six months later, when Daniel visits Miyagi, he announces that he has car trouble, girl friend woes, and his mother has to relocate to Fresno, California, for work. Miyagi demonstrates breathing exercises to calm Daniel. The next morning, Daniel is thrilled when Miyagi gets permission from the boy’s mother to have him as a houseguest for the summer. Soon, the postman brings a letter from Okinawa, Japan, informing Miyagi that his father is seriously ill. In line at the passport office, Daniel learns that Miyagi’s old girl friend, Yukie, sent the letter. Although Miyagi and Yukie were in love, she was obligated to enter into an arranged marriage with Miyagi’s best friend, Sato. Forty years ago, when Miyagi told villagers he would buck tradition and marry Yukie, Sato challenged him to a fight to restore his honor. Miyagi did not want to fight and left Okinawa. Daniel assumes that Sato dropped his grudge, but Miyagi remarks that honor has no time limit. As Miyagi is about to board the plane, Daniel shows up with a ticket paid for out of his college savings. Miyagi is touched that Daniel wants to support him during a difficult time and relents to having his company during the trip. At the Okinawa airport, Miyagi and Daniel are met by Sato’s nephew, Chozen, and driven to a warehouse. There, Sato appears and informs Miyagi that they have old business to settle, but before they fight, Miyagi must take care of his father. After his rival leaves, Miyagi insists he does not intend to fight Sato. When Miyagi sees his father, Yukie sits beside his bed, and Miyagi is shocked to learn that she never married. In the morning, Daniel finds Miyagi warming up in the family dojo. The room is filled with four hundred years of family history, and karate rules are displayed in Japanese on long banners, hanging on the wall. As Daniel and Miyagi walk through the village, Miyagi says Sato had a big fishing boat and monopolized the local fishing economy. Many of the locals turned to farming vegetables to support themselves. Soon, Sato arrives and proposes that Miyagi fight him that night. When Miyagi says he will not be there, Sato removes his jacket to fight. However, Yukie appears and says Miyagi’s father wants to see both men. The elderly man takes their hands, joins them together, and dies. Out of respect for Miyagi’s father, Sato tells his rival he has three days to mourn. Afterward, Sato declares honor will be restored. Later, Miyagi and Daniel walk to a wharf. Miyagi dislodges a grappling hook from the side of a building and uses his karate technique to deflect it as it flies by. When Daniel tries to duplicate the move, he falls into the river. Meanwhile, Miyagi remarks that he and Yukie had their first date at this spot. Later, Daniel helps a villager wheel his carrot crop to Chozen’s weighing station. Daniel accidentally discovers the scale has been rigged, and makes an enemy. At night, when Miyagi asks Yukie why she never married, she tells him it is because he never returned. Miyagi confesses the biggest mistake he made when he left is that he did not take Yukie with him. The next day, Daniel plays with a Japanese toy pellet drum and tries to figure out why it is the secret to Miyagi’s karate technique. Yukie’s niece, Kumiko, joins him. The toy reminds her of a dance and she shows him the steps. Chozen makes fun of their dancing, jabs Daniel with the toy and warns him not to insult his honor or he will be killed. As Kumiko helps Daniel back to the house, they see Miyagi courting Yukie during a tea ceremony. The next day, Kumiko takes Daniel sightseeing. She shows him an ancient castle now owned by Sato. In town, Daniel peers through a window, and sees Chozen giving a karate lesson. Kumiko wants to be a ballet dancer, and a friend invites her and Daniel to a dance. They wander into a bar where bets are being taken to see how many sheets of ice can be broken at one time. Chozen appears and dares Daniel to take the challenge. He refuses but Miyagi arrives and bets $600 that Daniel can break six sheets of ice. As Daniel panics, Sato appears and says he will cover Chozen’s bet. Miyagi and Daniel do their breathing exercises together until Daniel summons his energy to break all six sheets. Miyagi collects their winnings and tells Sato he enjoys doing business with him. The following day, Chozen informs Miyagi that the three days of mourning are over, and he must fight. When Miyagi responds that he is a farmer not a fighter, Chozen and his associates destroy the family crops. Later, as Daniel and Kumiko enjoy the dance, Chozen punches Daniel and takes his winnings. When Daniel sees Chozen’s cohorts harassing Kumiko, he fights back. He and Kumiko escape and drive away in her car. As Daniel goes to bed, he hears Sato in the street demanding that Miyagi fight. When Miyagi does not appear, Chozen and his friends taunt Daniel and vandalize Miyagi’s father’s garden and dojo. Soon, Miyagi appears and fights Chozen and his cohorts. Later, he tells Daniel it is time to go home. In the morning, Miyagi explains to Yukie that it is not possible to stay. She understands his predicament and asks if he will take her to America. Soon, Sato sends a bulldozer to destroy the town. Miyagi can no longer ignore Sato’s rage and agrees to fight on condition that title to the land passes to the village forever, no matter who wins. At first, Sato says Miyagi asks for too much but Miyagi argues it is a small price for Sato to pay for his honor. The rival demands the fight take place at midnight and warns Miyagi not to try any tricks. Later, Miyagi gives Daniel his will. Daniel wants Miyagi to leave without fighting, but he claims he is fighting for the survival of the village. Daniel meets Kumiko at the wharf and she prepares a tea ceremony for him. He drinks the tea, they kiss and hear a storm warning. Villagers scramble into a communal storm shelter. When Miyagi and Daniel help some villagers caught in the rain, they see Sato’s house collapse. Chozen runs by and claims his uncle is dead. However, they rescue Sato, who is trapped underneath fallen timbers. Daniel also rescues a girl hanging precariously from a wooden pole. Sato orders Chozen to help Daniel but he refuses. From the shelter, Sato watches Daniel slip in the mud and comes to his rescue. As Sato carries the girl to safety, he tells Chozen he is now truly dead to his nephew. Chozen runs into the storm. The next morning, as the villagers clean up the damage, Sato presents the village deed to Miyagi, asks to be forgiven and promises to help clean up. Sato also agrees to Daniel’s request to host the O Bon dance at the castle to honor ancestral spirits. The dance is a great success and Kumiko performs solo. However, Chozen ambushes Kumiko as she dances and holds a knife to her throat. Sato tells his nephew his actions are dishonorable, but Chozen claims he cannot hear Sato because his uncle is dead to him. Chozen demands that Daniel fight with him. After he releases Kumiko, they take turns landing blows. As they stagger from the physical punishment, the villagers thump their toy drums in support. Daniel draws strength from the rhythm and delivers a series of grueling hits. Finally, he asks Chozen whether he wants to live or die. When he replies, “Die,” Daniel says he is wrong, and tweaks his nose. He and Kumiko hug as Miyagi smiles.