In the Southeast Asian country of Shadaloo, where General M. Bison (Raul Julia) has been waging a war with the A.N. (the Allied Nations -- a U.N.-like military force) after he has taken several dozen A.N. hostages, putting them up for a ransom of $20 billion dollars. Leading the A.N. counterattack is United States Colonel William F. Guile (Jean-Claude Van Damme), a headstrong and gifted fighter that Bison can't wait to challenge in hand-to-hand combat. Many others would converge at Bison's stronghold, including television reporter Chun-Li Zang (Ming-Na), arms dealer Victor Sagat (Wes Studi), and a couple of roguish martial artists named Ken (Damian Chapa)and Ryu (Byron Mann).