Heihachi Mishima, the powerful and ruthless owner of the Mishima Zaibatsu conglomerate, announces the King of the Iron Fist Tournament, a fighting tournament with a one billion dollar cash prize to the winner. One competitor from within the tournament is Kazuya Mishima, Heihachi's estranged son who has entered for revenge against his father.
When Kazuya was only five years old, Heihachi had carried him to the top of a mountain and callously threw him off a cliff to test his son's strength and see if he would be able to climb back up the same cliff (this test would determine on whether or not Kazuya was worthy to be Heihachi's heir so that he would be able to inherit the Mishima Zaibatsu one day from within the future). Kazuya survived the initial fall, but with a large scar on his chest, this caused the Devil gene to activate that he inherited from his mother, offering Kazuya the opportunity to gain immense strength and power so that he can have his revenge against Heihachi, driven by anger and hatred while having with life-threatening wounds, he climbed back up.
The King of the Iron Fist Tournament takes place twenty-one years later, and by now Kazuya is an undefeated fighting champion (the only blemish on his record is a draw against Paul Phoenix: an American martial artist who seeks to settle the score with Kazuya while hoping to win the tournament at the same time). Kazuya enters the tournament and ultimately makes it to the final round, where Heihachi awaits him, angry and furious to know of his estranged son's winnings.
Kazuya and Heihachi clash in battle atop the same cliff from which Heihachi tossed Kazuya years earlier until Kazuya, now powered by the strength given to him by the Devil, overpowers Heihachi and beats him into an unconscious state. Kazuya picks up his father's body and drops him from the cliff. Smiling to himself, Kazuya becomes the owner of the Mishima Zaibatsu.