In the 1930s, Foshan is a hub of Southern Chinese martial arts, where various schools actively recruit disciples and compete against each other. Although the Wing Chun master Ip Man is the most skilled martial artist in Foshan, he is unassuming and maintains an almost invisible profile. As an independent wealthy man, he feels no need to accept any disciples and instead spends his days training, meeting with friends, and spending time with his family. However, his wife is often resentful of the time he spends training and discussing martial arts with friends and colleagues. Though not a professional martial artist, Ip is respected in Foshan due to the abilities he displays in friendly, closed-door competitions with local masters. Ip’s reputation is further enhanced when he defeats an aggressive, rude, highly skilled Northern Chinese martial arts master, Jin Shanzhao, thus upholding the regional pride of fellow Southern stylists and others in Foshan.
The Japanese invasion in 1937 adversely affects the life of everyone in Foshan. The Imperial Japanese Army claims Ip’s house and uses it as their Foshan military headquarters. Ip and his family lose their wealth and are forced to move into a decrepit apartment. Desperate to support his family, Ip finds work at a coal mine. The Japanese General Miura, a Karate master, establishes an arena where Chinese martial artists compete with his military trainees. Li Zhao, a former police officer and Ip’s acquaintance, now works as an interpreter for the Japanese army. He offers the martial artists working at the coal mine the chance to earn a bag of rice for every match they win. Ip, at first, declines. However, when his friend, Lin, disappears after taking part in a match, Ip agrees so that he can find his friend. Ip watches fellow Foshan martial arts practitioner, Master Liu, defeat one karateka, but then Liu insists on fighting three at once and loses. When Liu attempts to collect the winning bag of rice from the first match, Miura’s second in-command, Colonel Sato, shoots and kills him. Miura points Sato’s own gun to Sato’s head and threatens to personally execute him if he shoots in the dojo again.
As a result of the shooting, Ip deduces that the Japanese beat and killed Lin after an earlier fight. Barely containing his rage, Ip demands a match with ten karateka at once. Despite having not practiced Wing Chun since the Japanese occupied Foshan (to conserve energy and thus food for his family), he mercilessly defeats them all with a brutal and effective barrage of blows, showing none of the restraint he exhibited in earlier matches. His skill arouses the interest of Miura, who wants to learn more about Ip and watch him fight again.
Ip later visits his friend, Chow Ching-Chuen, who owns and runs a cotton mill in Foshan. Chow’s son tells Ip that a bandit gang led by Jin is harassing the workers and trying to extort money from them. Ip finally consents to teach others and trains the workers in Wing Chun for self-defense.
When Ip refuses to return to the arena, Miura grows impatient and sends Sato along with several soldiers to find him. Sato sees Ip’s wife and approaches her. Ip defends his wife and incapacitates three soldiers. They flee their apartment and take a room with Li’s family. When the bandits return to the cotton mill, the workers fight back using the techniques that Ip taught them. Ip himself arrives midway through the battle. He defeats many of the robbers and personally beats Jin, embarrassing him yet again. Ip warns him not to harass the workers again.
Jin and his men inform the Japanese soldiers of Ip’s connection to the cotton mill. The Japanese charge into the cotton mill and take Ip. Ip tells Chow to take his wife and son away for protection. Miura says that Ip’s life will be spared if Ip agrees to instruct the Japanese soldiers in martial arts. Ip refuses and challenges Miura to a match. Miura accepts because of his love for martial arts and to avoid humiliation to the Japanese. The match between Ip and Miura is held in public in Foshan’s square. Sato also offers to spare Ip’s life if he throws the match. At first, the two fighters seem equally matched, but Ip eventually overwhelms and inflicts a severe beating on Miura through an impeccable defense and relentless and direct blows.
The Chinese crowd cheers Ip, who sees his wife and child returning with Chow. Enraged at Miura’s defeat, Sato shoots Ip in the chest, inciting the Chinese crowd who overwhelm the Japanese soldiers. During the scuffle, Li kills Sato with Sato’s own gun. Ip is taken away among the chaos. The epilogue reveals that he survives and escapes with his family to Hong Kong with Chow’s help. There, Ip establishes a Wing Chun school, where his students, including Bruce Lee, come to learn martial arts from him.