In 1959, Ip Man is settling into his low-profile life in Hong Kong. His elder son, Ip Chun, has returned to Foshan to study, leaving him with his younger son Ip Ching and his wife Cheung Wing-Sing in Hong Kong.
A young Bruce Lee visits Ip and asks to become one of his students. After Lee demonstrates his speed to Ip, Ip neither accepts nor rejects him and tells him to “come back later”. Ip Ching is seen fighting with another boy, Cheung Fung, at school, and both boys end up with minor injuries. Wing-sing, along with Ip, is asked by Miss Wong, the boys’ teacher, to come to the school. As an apology, the Ip family invite Cheung Fung to their home for dinner. At Ip’s house, Cheung Fung displays rudimentary yet impressive Wing Chun skills. When Ip asks the boy who his mentor is, he says that it is his father, Cheung Tin-chi. Cheung shows up to pick up his son shortly after.
Cheung is seen participating in black market boxing matches and having a streak of victories. The organiser, Ma King-sang, a local triad leader, also works for Frank, an American property developer. Frank orders Ma to acquire a piece of land occupied by the school where Ip Ching and Cheung Fung study. Ma asks for a month for it to be done, but is threatened into assuring that it will be done within two weeks. Meanwhile, Frank is impressed by Cheung’s Wing Chun skills.
The next day, when Ip goes to pick up his son from school, he witnesses Ma and his men coercing and beating the headmaster, who refuses to sell them the school. Ip interferes and restrains Ma, but is forced to let Ma go as Ma’s men are holding Miss Wong at knife point. Ip seeks help from Sergeant “Fat Po”, a close friend of his and a local police detective. Fat Po agrees to help Ip, but claims a shortage of manpower and influence. Ip then agrees to guard the school alongside his students.
That night, Ip and his students watch the school compound. Lik, Ip’s oldest student, develops a crush on Miss Wong, but the latter promptly rejects his advances. Realizing that it is getting late, Ip suggests Lik and the other students return home; however, immediately after that, Ma’s men invade the compound. Although Ip and his students are able to hold them at bay, they are still outnumbered as the gang manages to kidnap the headmaster and set fire to a few classrooms. Cheung, who happens to pass by, helps fight off the invaders and rescues the headmaster. Cheung’s skills impress Ip, and Ip thanks Cheung for his help.
Tin Ngo-san, a local martial arts master and Ma’s former mentor, is enraged by Ma’s unscrupulous acts, and accompanied by Ip, confronts Ma at the Hong Kong shipyard and slaps him in front of his men. Ma retaliates with a hidden knife, but Ip is able to stop him from nearly stabbing Tin and again restrains him. Fat Po arrives and keeps the situation at bay, but Ip eventually lets Ma go to de-escalate the situation. Humiliated, Ma finds Cheung and offers him a job: to get revenge against Tin on his behalf. Desperate for money to open his own martial arts school, Cheung accepts the offer. Meanwhile, Wing-sing is diagnosed with stomach cancer.