Lee, a highly proficient Shaolin martial artist and instructor from Hong Kong, is approached by Braithwaite, a British intelligence agent investigating the suspected crime lord Han. Lee is persuaded to attend a high-profile martial arts competition on Han’s private island to gather evidence that will prove Han’s involvement in drug trafficking and prostitution. Shortly before his departure, Lee also learns that the man responsible for his sister’s death, O’Hara, is working as Han’s bodyguard on the island. Also fighting in the competition are Roper, an indebted gambling addict, and fellow Vietnam war veteran Williams.
At the end of the first day, Han gives strict orders to the competitors not to leave their rooms. Lee makes contact with undercover operative Mei Ling and sneaks into Han’s compound, looking for evidence. He is discovered by several guards but manages to escape. The next morning, Han orders his giant guard Bolo to kill the guards in public for failing their duties. After the execution, Lee faces O’Hara in the competition and ends up killing him. With the day’s competition over, Han confronts Williams, who had also left his room the previous night to exercise. Han believes Williams to be the intruder and beats him to death when he refuses to cooperate. Han then reveals his drug operation to Roper, hoping that he will join his organisation. He also implicitly threatens to imprison Roper, along with all the other martial artists who joined Han’s tournaments in the past, if Roper refuses. Despite being initially intrigued, Roper refuses after learning of Williams’s fate.
Lee sneaks out again that night and manages to send a message to Braithwaite, but he is captured after a prolonged battle with the guards. The next morning, Han arranges for Roper to fight Lee, but Roper refuses. As a punishment, Roper has to fight Bolo instead, whom he manages to overpower and beat after a gruelling encounter. Enraged by the unexpected failure, Han commands his remaining men to kill Lee and Roper. Facing insurmountable odds, they are soon aided by the island’s prisoners, who had been freed by Mei Ling. Han escapes and is pursued by Lee, who finally corners him in his museum. After a brutal fight, Han runs away into a hidden mirror room. The mirrors give Han an advantage, but Lee breaks all the room’s mirrors to reveal Han’s location, and eventually kills him. Lee returns outside to the main battle, which is now over. A bruised and bloodied Roper sits victorious while the military finally arrive to take control of the island.