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.

Recently relocated from NJ to LA, Daniel becomes the target of a gang of Cobra Kai dojo students. When Mr. Miyagi saves him with expert Karate skills, Daniel convinces him to teach him to defend himself, and put his bullies in their place.