Following the death of Chen Jun (Bruce Lee), the Ching Wu school face a difficult time with the Japanese. Since the death of Suzuki by the hands of Chen, the Japanese are determined to make the rest of the Ching Wu students and any supporters pay, and quickly establish power in Shanghai.

The new leader of the Japanese, Moto (Lo Lieh), calls a meeting of all the local martial arts school leaders and singles out the Ching Wu school as being their enemy. After branding, and even killing some of the students, the master of the Ching Wu school is left with no option but to sign over the school to the Japanese.

Since the demise of the Ching Wu school, their teacher becomes a complete mess and spends his days drunk. Just when it seems that all hope is lost for the Ching Wu school, Chen Shan (Ho Chung-Tao), the brother of Chen Jun, arrives in Shanghai to visit his brothers grave. When a group of Japanese fighters turn up and declare that the graveyard is off limits, Chen Shang proves that he is more than capable of dealing with their bullying.

Following the incident at the graveyard, Moto orders the Chinese Police Inspector to go and arrest Chen, and hand him over to him within two days. With the situation with the Japanese getting worse, Chen is begged to leave Shanghai but he refuses. It is only when the Police Inspector persuades him that it would be better for everyone that he agrees. 

However, Moto is not happy with this and sends men to kill him on board the train. Barely escaping with his life, Chen Shan realises that there is only one way to establish the Ching Wu school and free Shanghai of the Japanese rulers.