Plot

U.S. Army Captain Frank Dux (Jean-Claude Van Damme) has trained in the ways of Ninjutsu under his Sensei Senzo Tanaka (Roy Chiao). As a boy, Dux and a group of his friends broke into Tanaka's home to steal a Katana, but Dux was apprehended while returning the Katana to its place. Impressed by Dux's integrity and toughness, Senzo decided to train him alongside his son, Shingo (Sean Ward). Gradually Shingo and Dux become best friends. Shingo's dream was to make Tanaka proud by competing in the Kumite.

After Shingo's death, Senzo trains Dux as a member of the Tanaka clan. Senzo took pride in his family's generational knowledge of the martial arts and was heartbroken that the chain was broken with Shingo's death. But Dux steps up and says he will be a son to Senzo and will keep the Tanaka tradition alive. The training is brutal, but Dux learns how to control pain, fight blindfolded and how to meditate till nothing can distract him.

Dux is invited to the Kumite, an illegal martial arts tournament in Hong Kong. Dux is now in the US and in the Army. After his Army superiors Colonel Cooke (Ken Boyle) refuse to let him go, Dux goes absent without leave, says goodbye to his Sensei (who is a sick old man now) and leaves for Hong Kong. Two Criminal Investigation Command agents, Helmer (Norman Burton) and Rawlins (Forest Whitaker), are assigned to track down and arrest Dux. They question Mrs. Tanaka (Lily Leung) to figure out Dux's location, but she refuses to say anything. They eventually find his name on a flight to HK and head there.

After arriving in Hong Kong, Dux befriends American fighter Ray Jackson (Donald Gibb) and their guide Victor Lin (Ken Siu). They bond over playing some arcade games together. When they arrive at the Kumite arena (in a narrow alley, in the walled city area of HK, after passing an invisible border into China), the officials are skeptical (even though Jackson and Dux have their invitations) but eventually accept them after Dux proves his connection to the Tanaka clan by performing the Dim Mak death touch (by breaking only the bottom brick in the whole pile, leaving the rest intact).

The Kumite is organized every 5 years by the Black Dragon society to test martial arts skills in the fighters. There are 3 ways to win, knock out, run the opponent off the runway, or the opponent concedes by saying "Matte". On the first day of the tournament, Dux earns the enmity of the ruthless Kumite champion Chong Li (Bolo Yeung) after breaking his record for the fastest knockout. Chong Li is undefeated in the tournament, the defending champion and killed an opponent at the last Kumite, by kicking him in the throat.

Dux becomes involved with American journalist Janice Kent (Leah Ayres), who is investigating the Kumite. They have dinner and then sex. Although Dux refuses to help her, she sneaks into the arena by agreeing to a date with another spectator. On the second day, Jackson is matched against Chong Li. Dux tells Jackson to attack Chong Li's stomach and to stay away from his right leg. Although Jackson comes close to defeating Li, he wastes time gloating, allowing Li to recover and viciously beat him. Dux visits Jackson in the hospital and vows to avenge him. After witnessing the brutality of the tournament, Kent argues with Dux and tries to convince him not to return. Dux tells her that he has to win in order to become the best he can be.

Helmer and Rawlins arrive in Hong Kong and contact local police inspector Chen (Philip Chan). They begin asking around for Dux and track him down to his hotel. A chase through the downtown ensues but Dux evades them when they fall into a canal. When Dux arrives at the Kumite, Helmer and Rawlins are waiting for him, along with Chen and four of his officers. He eludes them as well but agrees to return with Helmer and Rawlins after the tournament.

On the final day, Li kills his opponent, much to the consternation of the crowd. Fearing defeat, Li conceals a salt pill in his waistband before the final match against Dux. When Dux gains the upper hand, Li blinds him by crushing the pill and throwing it into Dux's face. Dux falls back on his training from Tanaka, who taught him to fight blindfolded, overcoming the handicap and defeating Li. The next day, he bids farewell to Kent and Jackson before returning to the United States with Helmer and Rawlins. Frank wins 329 Kumite matches between 1975 & 1979 & retired undefeated. He still holds 4 world records in the tournament, including fastest KO 3.2 secs & most consecutive KO's 56.