12-year-old Dre Parker could've been the most popular kid in Detroit, but his mother's latest career move has landed him in China. Dre immediately falls for his classmate Mei Ying—and the feeling is mutual—but cultural differences make such a friendship impossible. Even worse, Dre's feelings make an enemy of the class bully, Cheng. In the land of kung fu, Dre knows only a little karate, and Cheng puts “the karate kid” on the floor with ease. With no friends in a strange land, Dre has no one to turn except maintenance man Mr. Han, who is secretly a master of kung fu. As Han teaches Dre that kung fu is not about punches and parries, but maturity and calm, Dre realizes that facing down the bullies will be the fight of his life.

The plot bears many similarities to the original Karate Kid film, with some notable differences. Twelve year old Dre Parker (Jaden Smith) is the most popular kid in Detroit, Michigan until he and his single mother (Taraji P. Henson) move because of a pivotal career change made by his mother. In their new home of Beijing, Parker falls for a young school student named Mei Ying. Both children find it hard to form a solid friendship with each other because of their cultural differences and because Ying's father does not approve of their relationship. To make matters worse, this attraction makes him the enemy of the infamous bully leader, Cheng, who gives Parker the nickname of "The Karate Kid" due to his severely limited knowledge of Karate, hence the title of the film.

With the bullies constantly throwing him to the ground, and with no one else to turn to, the outlook for Parker's new life looks bleak until he meets Mr. Han (Jackie Chan), who makes a deal with the bullies' kung-fu master that if they let Dre train they can fight Dre in the upcoming tournament. A quirky mentor and a kung-fu master in secret, Mr. Han teaches Parker kung-fu through unconventional, yet effective techniques to help make life in his new home an easier affair and hopefully stand up to the bullies. It involves training in places such as the Great Wall of China. The entire plot eventually builds up to a grand finale with Dre Parker battling against Cheng and his allies in a large scale Martial Arts Tournament.