Pepper Potts and Happy Hogan barge into Tony Stark’s office and hand Iron Man their letter of resignation. Tony has been "missing" for over a month and Iron Man seems to be unconcerned, as though he enjoys being in charge. They reveal their distrust of the so-called bodyguard and walk out. As Tony broods about this, Pepper and Happy are met by the police who ask for all that they know about Iron Man; they then pour out all their suspicions about Iron Man to the sympathetic detective. But an unscrupulous reporter overhears and soon the news of the Tony Stark/Iron Man mystery is on the front page of the newspaper. As Tony works feverishly on a way to remove his armor without stopping his heart, he hears the latest news on the television and sinks further into depression….
The next day, Happy Hogan decides to search for clues to the mystery in Tony Stark’s home. As he climbs into a bedroom window, Tony hears him coming and manages to leap into bed and pull up the covers to hide his armor. He tells the startled Happy that everything is all right, he’s just sick, and that Iron Man can be trusted. The delighted Happy calls Pepper with the news and she rushes over and soon the mansion is the center of a media circus. Later, Pepper and Happy are concerned that Stark doesn’t look particularly ill, and wonder if Iron Man is holding him prisoner.
Circling overhead late that night is a mysterious satellite, controlled by the Mandarin; at a command from the Asian villain the killer satellite sends a destructive beam straight at the Stark mansion. Iron Man detects its coming and jets out of there just seconds before the place is completely destroyed. When the news of this latest development hits the airwaves, Happy and Pepper head to the scene where Tony is assumed to be dead, and they accuse Iron Man of failing in his duty to protect his boss. Pepper takes her suspicions to the police but they do not listen, and Happy is overjoyed at no longer having a rival for Pepper’s affections—or so he tries to tell himself. Iron Man, meanwhile, has traced the trajectory of the beam to a small area in the orient and concludes it is the work of the Mandarin (despite the fact that the beam came from a satellite and not a stationary weapon). In disguise, the Golden Avenger takes a commercial flight to Asia and leaps overboard when over his target. But the Mandarin was expecting this visit: a tractor beam pulls the hero to the ground and flashing lights hypnotize Iron Man into believing that the villain’s huge robot is a giant human, and the hero loses the will to fight. When the hypnosis wears off, Iron Man finds himself chained to a massive wheel, with the Mandarin preparing to reveal the tale of his origin….