Thousands of years ago, Xu Wenwu discovers the mystical ten rings which grant immortality and godly powers. He establishes the Ten Rings organization, conquering kingdoms and toppling governments throughout history. In 1996, Wenwu searches for Ta Lo, a village said to harbor mythical beasts. He travels through a magical forest to the village entrance but is stopped by guardian Ying Li. The two fall in love, and Wenwu abandons the Ten Rings. When the villagers reject Wenwu, Li chooses to leave with him and they have two children, Shang-Chi and Xialing. When Shang-Chi is 7, Li is murdered by Wenwu's enemies, the Iron Gang. Wenwu massacres the Iron Gang and resumes leadership of his organization. He makes Shang-Chi undergo brutal training in martial arts, but does not allow Xialing to train so she teaches herself in secret. When Shang-Chi is 14, Wenwu sends him to assassinate the Iron Gang's leader. After fulfilling his mission, a demoralized Shang-Chi runs away to San Francisco and adopts the name "Shaun".
In the present day, Shang-Chi works as a valet with his best friend Katy, who does not know about his past. They are attacked on a bus by the Ten Rings, who steal a pendant that Li gave to Shang-Chi. Wenwu anonymously provides Shang-Chi with the location of Xialing and, fearing that the Ten Rings will go after Xialing's matching pendant from Li, Shang-Chi decides to meet her. He reveals his past to Katy, who insists on helping him. They find Xialing at an underground fight club in Macau, which she founded after escaping from Wenwu. The Ten Rings attack the fight club and Wenwu arrives to capture Shang-Chi, Katy, Xialing, and her pendant.
They are taken to the Ten Rings' compound, where Wenwu uses the pendants to reveal a magical map leading to Ta Lo. Wenwu explains that he has heard Li calling to him and believes she has been held captive in Ta Lo behind a sealed gate. He plans to destroy the village unless they release her. When his children and Katy object, he imprisons them. The three meet former actor Trevor Slattery, whom the Ten Rings imprisoned for impersonating Wenwu,[N 1] and his hundun companion Morris, who offers to guide them to Ta Lo.
The group escapes and goes to Ta Lo, which exists in a separate dimension with various Chinese mythological creatures. They meet Ying Nan, Li's sister, who explains the history of Ta Lo: thousands of years ago, the village was attacked by the soul-consuming Dweller-in-Darkness and its minions, but was saved by a Chinese dragon called the Great Protector who helped seal the Dark Gate to the Dweller's world. According to Nan, the Dweller-in-Darkness has been influencing Wenwu to believe Li is still alive so that he will open the Gate. Shang-Chi, Xialing, and Katy join the villagers in training and preparing for Wenwu's arrival, using outfits and weapons crafted from dragon scales.
Wenwu and the Ten Rings arrive and attack. Wenwu overpowers Shang-Chi and forces him into the nearby lake, then attacks the Gate with the rings. This allows some of the Dweller's minions to escape, and the Ten Rings join forces with the villagers to fight them. Shang-Chi is revived by the Great Protector, which leaves the lake to battle the minions. Wenwu and Shang-Chi fight once more and Shang-Chi gains the upper hand, but chooses to spare Wenwu. The Dweller-in-Darkness escapes the weakened Gate and attacks Shang-Chi. Wenwu saves Shang-Chi, bequeathing him the rings before being killed by the Dweller-in-Darkness. Shang-Chi, the Great Protector, Xialing, and Katy battle and kill the Dweller-in-Darkness. Afterwards, Shang-Chi and Katy return to San Francisco where they are summoned by the sorcerer Wong to the Sanctum Sanctorum.
In a mid-credits scene, Wong introduces Shang-Chi and Katy to Bruce Banner and Carol Danvers. They discover that the ten rings are emitting a mysterious signal. In a post-credits scene, Xialing becomes the new leader of the Ten Rings after telling Shang-Chi that she was going to disband the organization.
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