Tony Stark (ROBERT DOWNEY JR.) is a playboy industrialist who's followed in his late father's footsteps of developing weapons for the military. With the help of his computer systems and assembly line robots, not to mention his flesh and blood personal assistant, Pepper Potts (GWYNETH PALTROW), Tony is something of a celebrity. All of which means while he might get tough questions from reporters such as Christine Everhart (LESLIE BIBB), he's just as likely to end up in bed with her.
But business beckons, so while his mentor Obadiah Stane (JEFF BRIDGES) stays home to run Stark Industries, Tony's off to Afghanistan with his college buddy and current military liaison, Jim Rhodes (TERRENCE HOWARD), to show off his latest weaponry. An ambush there, however, leaves him injured and then held captive by insurgent leader Raza (FARAN TAHIR) and his right-hand man, Abu Bakaar (SAYED BADREYA).
A fellow captive, Yinsen (SHAUN TOUB), has saved Tony's life by implanting an electromagnetic device into his chest that prevents embedded shrapnel from entering his heart. He ends up being Tony's assembly assistant when Raza orders the industrialist to build him the same weaponry he had earlier been pitching.
Instead, and realizing he and Yinsen will likely be killed no matter what they deliver, Tony creates an armored suit that's impervious to bullets and allows him to escape. Having seen his weapons in the hands of Raza, Tony has a change of heart and announces that Stark Industries will no longer build weapons, a decision that doesn't sit well with Obadiah. Instead, Tony creates an enhanced version of his armored suit, hoping he can use it to undo many of the past wrongs he's created.
From that point on, he must not only contend with Obadiah, but also the fact that Raza has collected the remains of his original Iron Man suit and is building one of his own, what will eventually become the Iron Monger.