"Now, when we fought, you had that eye of the tiger, man; the edge!

                And now you gotta get it back, and the way to get it back is to go

                          back to the beginning. You know what I mean? '

Three years after the events of Rocky II, Rocky Balboa, has become the new heavyweight champion of the world. Rocky begins a string of 10 successful title defenses. As his winning streak grows, so does his fame and celebrity. At the same time, James "Clubber" Lang (Mr T.) is climbing the rankings, becoming the number one contender for Balboa's title. Rocky’s brother-in-law Paulie has grown jealous of Rocky’s accomplishments. After a night of drinking, Paulie destroys a ROCKY pinball machine in a rage and is arrested. Rocky goes to bail him out of jail and, on the way to Rocky's car, Paulie begins berating Rocky for apparently forgetting him on his climb to the top. Rocky calls Paulie a "jealous, lazy bum" and Paulie starts lunging at him. After several failed attempts to land any punch on Rocky, Paulie swallows his pride and asks Rocky for a job working his corner and helping him train....to which Rocky agrees.

Rocky agrees to a charity boxing/wrestling match with Wrestling champion, Thunderlips (Hulk Hogan). Rocky treats the whole affair as light-hearted fun; Thunderlips, however, attacks Rocky with a variety of wrestling moves. After being thrown out of the ring, Rocky decides to remove his gloves and fight back, even managing to throw the hulking Thunderlips out of the ring. Just as the match degenerates into a real fight, the bell rings and the match is declared a draw.

Later we see that Rocky has a statue unveiled in Philedelphia and reveals his plans to retire. Clubber Lang, who is in attendance at the ceremony, challenges Rocky yet again, this time criticizing Rocky’s title defence as being fixed. Rocky agrees to the fight, but Mickey, his trainer, wants no part of it. He admits to Rocky that the fighters he defended his title against were hand-picked, but only because Rocky received such a bad beating in his win over Creed. He also tells Rocky that Lang is a young and hungry "wrecking machine" and that Rocky has no chance beating him. Rocky manages to convince Mickey to train him, but his Vegas-style training camp is filled with distractions.

Lang and Rocky meet at Philadelphia's Spectrum. During a melee before the fight, Mickey is inadvertently punched in the heart by Lang, and suffers a heart attack. Rocky wishes to call the fight off, but Mickey urges him on while he stays in the dressing room. By the time of the fight, Rocky is both enraged and severely distracted by his mentor's condition, and despite attacking Lang fiercely in the beginning of the fight, Rocky is easily knocked out by Lang in the second round, losing the title. Rocky returns to the locker room to have one final conversation with Mickey before his old mentor passes away.

In a fit of depression, Rocky is confronted by Apollo Creed, who offers to help train him. Previously, Creed's offer to shake hands with both fighters was sharply rebuffed by Lang, who called Creed a has been. Creed convinces Rocky to challenge Clubber again, only this time Creed will help him train. Apollo takes him to the slums of Los Angeles so that Rocky can get back to the basics. At first, Rocky is too demoralized to put forth his best efforts. However, after admitting to Adrian that he's afraid and after Adrian tells Rocky to do the fight for himself, and no one else, he pulls himself together to train as hard as he can.

The rematch is held at Madison Square Garden in New York City. With the odds of Rocky recovering his title strongly against him, Rocky is ready for anything. During the rematch, Rocky fights with a level of skill and fighting spirit that no one, including Clubber Lang, had expected. As a result Rocky completely dominates the first round, scoring punch after punch and demonstrating his newfound speed, modeled somewhat after Apollo's fighting style. Defying Creed's corner advice, Rocky intentionally takes a beating, and taunts Lang, gambling that Lang will tire before Rocky is knocked down, which frustrates Lang because he is used to quick knockouts instead of endurance matches. Clubber wears himself out, and is defeated with a knockout in the third round. Rocky recovers his world heavyweight championship and his self-respect.......

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