Thousands of years ago, Xu Wenwu discovers ten mystical rings that grant him immortality, immense strength, and extraordinary energy-based powers. With the rings, Wenwu becomes an unstoppable warlord and establishes the Ten Rings organization, a secret criminal empire that influences world events for centuries. Despite conquering kingdoms and amassing enormous power, Wenwu becomes obsessed with legends surrounding the hidden mystical village of Ta Lo, believing it holds secrets even greater than the rings themselves.

In 1996, Wenwu travels to the entrance of Ta Lo through a magical bamboo maze. There, he encounters Ying Li, a guardian of the village who refuses to let him enter. The two engage in a graceful martial arts battle, but their conflict slowly turns romantic as they become drawn to one another. Wenwu abandons the Ten Rings and gives up his violent life to be with Li. Together they build a peaceful family and raise their children, Shang-Chi and Xialing. Li teaches her children the mystical martial arts of Ta Lo, while Wenwu attempts to leave his dark past behind.

Their happiness is shattered when members of Wenwu’s former enemies, the Iron Gang, track him down seeking revenge. While Wenwu is away, the gang murders Ying Li outside their home. Devastated and consumed by grief, Wenwu returns to his old ways and reclaims the Ten Rings. Blaming weakness for Li’s death, he begins training Shang-Chi to become a ruthless assassin under the supervision of the masked warrior known as Death Dealer. For years, Shang-Chi endures brutal physical and emotional training. At the age of fourteen, Wenwu sends him on his first assassination mission against the leader of the Iron Gang. After completing the mission, Shang-Chi is horrified by what he has become and flees to the United States, leaving Xialing behind.

Ten years later, Shang-Chi lives in San Francisco under the name “Shaun” and works as a hotel valet alongside his best friend Katy Chen. The two spend most of their time avoiding responsibility and enjoying their carefree lifestyle, despite pressure from Katy’s family and friends to do something more meaningful with their lives. One morning, while riding a city bus to work, Shang-Chi is suddenly attacked by a group of assassins sent by the Ten Rings organization. During the chaotic fight, Katy struggles to control the speeding bus after the driver is incapacitated. Shang-Chi reveals his incredible martial arts abilities while fighting across the collapsing vehicle against Razor Fist, a deadly assassin with a machete-like blade replacing one of his arms. Although Shang-Chi defeats most of the attackers, Razor Fist succeeds in stealing the green pendant his mother once gave him.

Realizing the Ten Rings may also target his estranged sister Xialing, Shang-Chi decides to travel to Macau after discovering a postcard connected to her. Katy insists on accompanying him, forcing Shang-Chi to finally reveal the truth about his past. During the flight, Shang-Chi admits his real name and recounts his childhood training under Wenwu and Death Dealer. He also confesses that he did carry out his father’s assassination mission before running away to America in shame.

Upon arriving in Macau, Shang-Chi and Katy locate the Golden Daggers Club, an underground fight arena run by Xialing. Shortly after entering, Shang-Chi discovers his name has been entered into the tournament roster, forcing him into a public match against Xialing herself. The siblings reunite under hostile circumstances, with Xialing angrily confronting Shang-Chi for abandoning her after fleeing their father’s empire. She reveals she never sent the postcard that brought him there. Before they can resolve their issues, the Ten Rings attack the club to steal Xialing’s pendant as well.

During the assault, Shang-Chi battles Death Dealer, reliving memories of his traumatic childhood training. Before Shang-Chi can finish the fight, Wenwu arrives and effortlessly overpowers everyone. Shang-Chi, Xialing, and Katy are taken back to the Ten Rings headquarters, where Wenwu reveals he believes Ying Li is still alive. According to Wenwu, he has been hearing Li’s voice calling out to him from behind a sealed gate inside Ta Lo. Using the pendants belonging to Shang-Chi and Xialing, Wenwu creates a magical water map that reveals the path through the shifting bamboo maze leading to the hidden village. Convinced the people of Ta Lo are imprisoning Li, Wenwu declares his intention to destroy the village if necessary to free her.

Shang-Chi and Xialing try to convince their father that the voice is a lie, but Wenwu refuses to listen and imprisons them alongside Katy. Inside the prison, they meet Trevor Slattery, the eccentric actor previously used as a fake Mandarin by the Ten Rings, along with his strange six-legged creature companion Morris. Trevor explains that Morris knows a hidden route through the bamboo maze that can lead them safely to Ta Lo. Using an escape route discovered by Xialing, the group steals Razor Fist’s vehicle and escapes the compound after a fight with Ten Rings soldiers.

Guided by Morris, Katy drives through the constantly shifting bamboo maze until the group finally reaches Ta Lo. There they are confronted by village warriors before meeting Ying Nan, Shang-Chi and Xialing’s aunt. Nan explains the true history of Ta Lo and the terrifying creature known as the Dweller-in-Darkness. Long ago, the soul-consuming monster and its army of Soul Eaters nearly destroyed the realm before being sealed behind a magical barrier by the Great Protector, a powerful dragon. Nan realizes Wenwu has fallen under the Dweller’s influence, as the creature can imitate the voices of loved ones to manipulate people into freeing it.

As Ta Lo prepares for battle, Nan trains Shang-Chi in his mother’s graceful fighting style, teaching him to balance strength with control and compassion. Xialing learns to master a rope dart weapon, while Katy trains in archery despite having no combat experience. One night, Shang-Chi confesses to Katy that he lied about refusing to kill the Iron Gang leader during his first mission. Haunted by the fact that he carried out the murder, Shang-Chi fears he is becoming exactly like his father.

Soon afterward, Wenwu and the Ten Rings launch their attack on Ta Lo. Shang-Chi confronts his father outside the Dark Gate but is quickly overpowered and thrown into a nearby lake. Wenwu begins striking the barrier imprisoning the Dweller-in-Darkness with the Ten Rings, eventually weakening the seal and unleashing the Soul Eaters. Death Dealer is immediately killed when one of the creatures devours his soul, forcing the Ten Rings warriors and Ta Lo guardians to unite against the larger threat.

Beneath the water, Shang-Chi is rescued by the Great Protector dragon. Emerging renewed and empowered, he returns to confront Wenwu one final time. During their battle, Shang-Chi gradually gains control of the Ten Rings and pleads with his father to stop fighting. Before they can reconcile, the Dweller-in-Darkness breaks free completely and attacks them both. Realizing too late that he was deceived, Wenwu sacrifices himself to save Shang-Chi and willingly passes the Ten Rings to his son moments before the creature steals his soul.

The Dweller-in-Darkness fully emerges and begins overwhelming the defenders of Ta Lo. Working together, Shang-Chi, Xialing, Katy, the Great Protector, and the surviving warriors battle the monster and its Soul Eaters. Katy manages to strike the Dweller with a crucial arrow shot, allowing Shang-Chi to channel the power of the Ten Rings and destroy the creature in a massive explosion, ending the battle and saving Ta Lo.

After the battle, the survivors honor those who died during the conflict. Shang-Chi mourns his father while accepting his own identity and legacy. He and Katy eventually return to San Francisco and attempt to explain their adventure to their skeptical friends. Their conversation is interrupted when Wong appears through a portal and escorts them to Kamar-Taj. There, Bruce Banner and Carol Danvers study the Ten Rings and discover the ancient artifacts are transmitting a mysterious beacon signal into deep space. In a mid-credits scene, Xialing returns to the Ten Rings headquarters and assumes leadership of the organization, rebuilding it in her own image rather than dismantling it.