Daniel, Miyagi, and Taki succeed in returning the shrine to Okinawa. However at home Taki has to deal with a family feud that could lead to the shrine being lost once again.

In what used to be the USSR, the group find the shrine in a Soviet scientific research facility. The Friendship Games are taking place with the first time that Western nations have been invited in an effort to promote glasnost. Daniel has been put on the West's hockey team, which he worries that he cannot even skate, resorting to Mr. Miyagi's unconventional lessons once again. Meanwhile, one scientist steals the shrine to empower his son, who is playing on the East's hockey team, in order to prove the supremacy of the Soviets, only for both to get more than they bargained for.