Al is caught between his loyalty to the police force and his love for his brother in a tense setting. It seems that his brother, Rudy, was involved in a mob hit that could potentially start a gang war. Tony C., a local mob boss and childhood acquaintance of Al, hires him to find out who was involved in the hit. Al must find his brother and make some decisions.

During a commemoration for Japanese soldiers fighting in the US Army during World War II, Mr. Miyagi meets the widow of his commanding officer. He gets to know her granddaughter Julie, an angry teenager who is still feeling the pain of losing both her parents in an accident and is having problems with her grandmother and her fellow pupils. Mr. Miyagi decides to teach her karate to get her through her pain and issues and back on the right path.

Ken has just moved from Kansas with his mother. He talks to a girl named Julie, not knowing that her boyfriend Tom is very possessive of her. Tom is learning karate from Lee, a sensei whose brother was killed by a rookie cop named Billy. Billy has since then become the janitor of the school that Ken, Julie and Tom go to. When Ken gets beaten up by Tom for talking to Julie again, Billy helps Ken by teaching him how to defend himself, which eventually leads to a battle between student vs. student, and sensei vs. sensei.