In a flashback to New Year's Eve 1999, Tony, meets a scientist Maya Hansen in Bern, and arrogantly avoids crippled scientist Aldrich Killian, who wants Tony's backing in his endeavor, Advanced Idea Mechanics (AIM). Maya has an experimental plant. Sometime after the events of The Avengers, a haunted Tony Stark has obsessively built several Iron Man suits in his mansion. Tony works on a new model, the Mark 42, which is modular; all the suit pieces fly to him and recombine.In present-day America, At Stark Industries, Pepper meets Aldrich who demonstrates new DNA altering technology, Pepper refuses as it could be weaponized. She drives home and Tony has a huge stuffed toy for her as a gift. However, he is busy working and Pepper is upset. Happy is suspicious and follows Aldrich and his henchman, Savin. In front of Grauman's Chinese Theatre, Savin gives another man a briefcase. Happy tries to intercede but is beaten by Savin, and the other man explodes, leaving only his old dog tags. The Mandarin comes on TV and takes responsibility for the blast. Stark visits the comatose Happy and issues a televised threat to the Mandarin, then goes home to investigate the bombing with Jarvis, finding that Happy was able to point to a clue before becoming comatose. Maya suddenly knocks on the door, telling Tony to hide. Helicopter gunships, led by Savin, attack with missiles. Tony commands the 42 suit to cover and protect Pepper. Pepper and Maya survive the attack. Tony gets the 42 back but down on power he cannot fly, the house crumbles into the sea taking the Ironman down. The suit regains some power and flies off, unseen. Tony then finds himself in rural Tennessee after JARVIS (his artificially intelligent computer system) follows a flight plan from Tony's investigation into the Mandarin. On crash landing, JARVIS and the 42 suit run out of power. The world believes him dead.Teaming with Harley, a precocious 10-year-old boy, Tony investigates the remains of a local explosion bearing the hallmarks of a Mandarin attack. He discovers the explosions were triggered by soldiers from the Extremis program, an experimental treatment intended to allow its users to recover from crippling injuries. However, if a user's body cannot properly metabolize Extremis, the user's body heats to an extreme temperature and explodes. After veterans started growing unstable and exploding, their deaths were used to cover up Extremis' flaws by manufacturing a terrorist plot. Tony witnesses Extremis firsthand when Mandarin agents Ellen Brandt and Eric Savin attack him. Tony blows up the woman and stuns Savin to escape.With Harley's help, Tony traces the Mandarin to Miami. Stark infiltrates the estate headquarters using a variety of home-made weapons. Inside he discovers the Mandarin is actually a flighty British actor named Trevor Slattery, who is oblivious to the acts the Mandarin has carried out. The Mandarin is a creation of Killian, who appropriated Maya's Extremis research as a cure for his own disability and expanded the program to include injured war veterans. Tony is captured and taunted by Maya, who was working with Aldrich all along. She thinks Tony can help perfect the Extremis DNA. Aldrich arrives and reveals he has kidnapped Pepper and subjected her to Extremis, intending to infuse her with superhuman abilities and turn her against Tony as leverage to gain Tony's aid in fixing Extremis' flaws. Aldrich then kills Maya.Aldrich has also manipulated American intelligence agencies regarding the Mandarin's location, luring James Rhodes the former War Machine, now rebranded as the "Iron Patriot", into a trap to steal the armor. Tony escapes his captivity by summoning the 42 suit from Tennessee, and reunites with The Colonel on the estate, discovering that Aldrich intends to attack President Ellis aboard Air Force One. Savin boards the President's plane wearing the Iron Patriot suit, kills the Secret Service agents aboard and takes the President. Savin then blows holes in the airliner body and survivors fall out. Iron Man kills Savin and manages to rescue the falling people, Tony had been controlling the unit by remote control. Meanwhile the Iron Patriot flies away. Tony and Rhodes trace Aldrich to an impounded oil drilling platform where Aldrich intends to kill Ellis on live television. The Vice President will become a puppet leader, following Aldrich's orders in exchange for Extremis to cure a little girl's disability.On the platform, Tony goes to save Pepper, and Rhodes saves the President. Tony summons a fleet of his various Iron Man suits, controlled remotely by JARVIS, to provide air support and attack the many other Extremis infected guards. Rhodes secures the President and leads him to safety, while Tony discovers Pepper has survived the Extremis procedure. However, before he can save her, a container crane rig collapses around them and she falls 200 feet to her apparent death. Tony is forced into confronting Aldrich using several suits and finally traps him in the 42 suit that self-destructs. But, a glowing Aldrich survives and staggers toward A defenseless Stark. Pepper shows up with Extremis powers and finishes off the weakened Aldrich.After the battle, Tony orders JARVIS to implement "Clean Slate" which destroys each remaining Iron Man suit remotely, as a sign of his intention to devote more time to Pepper. The Vice President and Slattery are arrested. In voiceover Tony mentions he cures Pepper, and Tony himself undergoes surgery to remove the shrapnel embedded near his heart. He pitches his obsolete chest arc reactor into the sea, musing he will always be Iron Man, even without his armor. He gathers some scrap parts from his house wreckage and drives off in his Audi eTron.In a post-credits scene, it is revealed that Stark has been recounting his experiences to Dr. Bruce Banner, who awakens, having fallen asleep at the beginning of Tony's story, followed by the words "Tony Stark will return".