Full story
The film opens on New Year's Eve 1999 in Switzerland. Tony Stark spends the night with scientist Maya Hansen, creator of Extremis, a treatment that lets the body regenerate. At the same party, he blows off Aldrich Killian, a disabled scientist who wants to pitch him his company, A.I.M. Tony leaves him waiting on a rooftop. That snub will come back to bite him.
Thirteen years later, Tony hasn't gotten over the Battle of New York. He has panic attacks, can't sleep and spends his nights building suits, more than 40 of them. His relationship with Pepper Potts suffers. Meanwhile, a terrorist called the Mandarin claims a string of bombings across the country. Happy Hogan tails one of Killian's men to the Chinese Theatre and is badly hurt in one of those blasts. Enraged, Tony threatens the Mandarin on TV and gives out his home address.
The answer comes in helicopters that destroy the Malibu mansion. Pepper and Maya get out. J.A.R.V.I.S. saves Tony, flying him in a new suit to rural Tennessee, where the power runs out. Presumed dead, he digs into an old explosion with help from a kid named Harley Keener. He learns there was never a bomb: soldiers treated with Extremis blow up when their bodies reject it. A.I.M. blames the Mandarin to cover up the flaws. With no working suit, Tony fights two Extremis soldiers using whatever he can find.
In Miami he breaks into the Mandarin's compound and finds Trevor Slattery, a British actor who only plays the terrorist in the videos. The real villain is Killian, who admits he invented the Mandarin. Maya turns on him, and he kills her. Killian has kidnapped Pepper, dosed her with Extremis and wants Tony to fix the formula. Meanwhile, Colonel James Rhodes loses his suit, now painted as the Iron Patriot, to Killian's henchman Eric Savin, who uses it to snatch President Ellis from Air Force One.
Tony escapes and, with Rhodes, heads to a dockyard where Killian plans to execute the president on live TV. Tony calls in all his suits, which fly in under J.A.R.V.I.S.'s control. Rhodes saves the president and Tony tries to save Pepper, but seems to lose her in a fall. She survives thanks to Extremis and kills Killian. The vice president, who was in on the plot, is arrested, and so is Slattery. Happy wakes up from his coma. Tony blows up every suit as a gift to Pepper, has surgery to remove the shrapnel and tosses the reactor into the sea. He closes by saying that, suit or no suit, he is still Iron Man. After the credits, it turns out he was telling all this to Bruce Banner, who fell asleep.