Iron Man 3 begins on New Year’s Eve, 1999. At a party, Tony Stark meets scientist Maya Hansen, the inventor of an experimental regenerative treatment named Extremis. This treatment allows a person to recover from many injuries. It’s also at this party where Stark meets a disabled scientist named Aldrich Killian. He offers the two a job in his company called Advanced Idea Mechanics. Stark declines the offer.
Cut to December 2012, and it’s seven months after the Battle of New York. Stark suffers from PTSD which gives him frequent anxiety attacks in the wake of the alien invasion. To cope, he has built many new Iron Man suits, much to the annoyance of his girlfriend, Pepper Potts.
Meanwhile, a terrorist going by the name of the Mandarin has unleashed a string of bombings, but the lack of any forensic evidence stifles intelligence agencies around the world. When Stark’s security chief, Happy Hogan, winds up badly injured in one such attack, Stark threatens the Mandarin on television. He then gives him his home address to come find him.
The Mandarin takes Stark up on the challenge, and sends helicopters armed with machine guns to shoot up Stark’s home. Hansen is there, and she, along with Potts, barely survive the assault. Stark flies out of his home in one of his experimental new Iron Man suits, and flies to Nowheresville, Tennessee. The new suit is not yet ready for Prime Time, and thus doesn’t have enough power to return back to California. In his absence, the world thinks Stark was killed in the ambush.
Stark now meets a 10-year-old boy named Harley, and then heads off to investigate the remnants of a local explosion which has many similarities to a Mandarin bombing. He learns that soldiers, who were exposed to the Extremis treatment, triggered the bombings when their bodies rejected said treatment. The explosions were then blamed on terrorists to cover up the flaws in Extremis. Stark soon comes face to face with Extremis when some Mandarin agents named Brandt and Savin attack him. Stark manages to kill Brandt, and then subdue Savin.
Elsewhere, Killian shows his ugly face again when he kidnaps Potts and Hansen. As American intelligence agencies continue their search for the Mandarin’s location, James Rhodes, now calling himself the Iron Patriot, is lured into a trap where Killian steals his armor.
Harley helps Stark trace the Mandarin’s location to Miami where he infiltrates his headquarters. Once there, he discovers the Mandarin is actually just an English actor named Trevor Slattery. He just sees the Mandarin as another paid gig, and he doesn’t have a clue that the bombings are carried out in his name.
Cut back to Killian, and we see he’s no longer disabled after he used Hansen’s Extremis research to cure his own disability. He then expanded that program to include any injured war veterans. He is actually the real Mandarin, and after he captures Stark, he reveals that he subjected the lovely Potts to Extremis; hoping it will force Stark to fix any flaws in the process. Instead, Hansen tries to stop Killian, and he shoots her dead.
Stark and Rhodes reunite after Stark escapes Killian’s clutches. He learns that Killian plans to attack President Ellis aboard Air Force One with the Iron Patriot armor that Savin now controls. Stark again subdues Savin, and manages to save some passengers along with Air Force One’s crew. However, Killian is still able to kidnap Ellis and destroy his plane.
They track Killian to an old oil tanker where Killian intends to execute Ellis on live television. He then reveals he has a deal with the Vice President to cure the Vice President’s daughter’s disability with Extremis in exchange for his loyalty and obedience once he’s President.
Out on the oil platform, Stark tries to save Potts, and Rhodes goes to save the President. Stark uses J.A.R.V.I.S. to remotely control his remaining Iron Man suits so they can provide air support. Rhodes finally rescues the President, and moves him to safety.
At the same time, Stark learns Potts thankfully survived the Extremis procedure. As he tries to save her, a rig collapses around them, and Potts falls to her death. Stark next attacks Killian, and manages to trap him in an Iron Man suit which self-destructs, but Killian doesn’t die. Potts, now with super Extremis powers survived the fall. She returns, and kills Killian.
Stark orders J.A.R.V.I.S. to destroy each Iron Man suit via remote control as a sign of his devotion to Potts. The authorities then arrest the Vice President and Slattery for their participation in Killian’s plot.
Now safe, Stark works on helping to control the effects of the Extremis treatment on Potts. He promises to cut back on his Iron Manning, and finally goes under the knife to remove the shrapnel near his heart. He tosses his now obsolete chest arc reactor into the sea. Even without that technology, he will always be Iron Man.
In a post credit scene, Stark realizes Bruce Banner slept through most of his story about taking out Killian, so he begins telling Banner another story, much to Banner’s chagrin. He’s just not that kind of doctor.