Although Drago has never had a professional boxing fight and all his achievements came as an amateur, he comes to the United States, convinced he can beat any American world boxing champion.
At the same time, Apollo Creed (played by Carl Weathers) wants to make a comeback and stop the Russian, whom he considers to be cocky and disrespectful.
Rocky reluctantly agrees to train his friend Apollo for a fight with the Russian, and the fight takes place in Las Vegas. The bout was apparently supposed to be an exhibition, but Drago doesn't take it that way and hammers Apollo unmercifully. Apollo died while in the ring, and on Rocky's arms.
After Apollo's death, Rocky started thinking about a comeback, and has a talk with his wife about it. Adrian Balboa (played by Talia Shire) tries to convince her husband not to do it and opposes a fight between Rocky and Drago. But Rocky takes a drive and starts thinking about his whole career as a boxer, his fights with Apollo, his friendships with the boxer and the trainer who helped shape his career as a boxer and the way they left this world, and so when he comes back home after that drive, he is convinced he wants to go to Russia to challenge Drago and try to avenge his friend Creed's defeat.
Rocky and Drago then sign up to meet in Moscow on a special bout to be held on Christmas Day. Rocky flies to Russia with Creed's former trainer and his brother in law Paulie and the three begin severe training for the fight in a total isolation in a remote area (The location used to film this part was actually in Italy). They are constantly spied on by members of Drago's team and spend their whole days training under the severe Russian winter. Drago, meanwhile, is in a specialized sports center using every type of machinery imaginable for his training. He is tested daily for all kinds of body reactions and extended to the limits by his trainers, while periodically being injected some kind of injection that probably was supposed to be something like steroids.
After months of intense training for both fighters, the final scene of the championship fight takes place, and Rocky is pummeled the first 2 rounds. However, realizing he's soon have to take matters on his own hand if he didn't wanna lose, he starts fighting back in round 3, cuts Drago by the middle rounds, and starts to have the crowd cheer him up. After round 14, they are both extremely tired, but Rocky has a little more left and he goes and drops Drago for the count, avenging Apollo's final defeat.
After the fight, Rocky goes on to deliver an anti Cold War message where he talks about union and friendship between both countries.
Because of his message in this sequel of Rocky and his characterization of an American military hero in Rambo:First Blood 2 also that same year, Stallone earned an award from President Ronald Reagan that year.