Doctor Stephen Strange is one of the foremost authorities in neurosurgery, with an ego and arrogance to match his unparalleled skill. Unfortaunately, while driving to a party one fateful evening, Strange find himself in a harrowing car accident which damages the nerves in his hands to such a degree that the precision and finesse that made him a master surgeon was gone. Unable to accept that he could never practice his trade again, Strange goes to extreme lengths to find a means to heal his hands, driving himself into financial ruin.
Eventually, Strange learns of Jonathan Pangborn, a paraplegic who miraculously regained the use of his legs. Strange seeks out Pangborn, who explains that he owes his regained mobility to the mystic arts learned from a mentor simply known as "the Ancient One", in the school of Kamar-Taj. Strange, being a man of science, finds these claims to be hard to believe. Nonetheless, with all other options exhausted, he decides to pursue this lead.
Strange uses what scant resources he still has to travel to Nepal, his search for Kamar-Taj leading him to Mordo, one of the Ancient One's pupils. Mordo gives Strange an audience with the Ancient One, who shatters Strange's skepticism with her powers, showing him the Astral Plane and the existence of parallel dimensions separate from the reality he knows of. Strange begs the Ancient One to teach him. While she refuses initially, the Ancient One ultimately decides to take him in and teach him the arts.
During his studies, Strange learns that the universe as he knows it is protected by three Sanctums; centers of magical power in New York, Hong Kong, and London that stave off the influence of the Dark Dimension and its ruler, Dormammu. It is the task of the sorcerers to protect the Sanctums, a task that had been given to Pangborn, who forsook his duty to regain the use of his legs. In time, Strange becomes increasingly adept in the mystic arts, but also increasingly curious about some of the forbidden aspects of magic; he sneaks peaks at prohibited texts and experiments with the Eye of Agamotto, an artifact that can manipulate the flow of time. When he is caught by Mordo and fellow sorcerer Wong, he is warned against tampering with the laws of nature, as it could have disastrous consequences for the world.
Such was the case with a group of sorcerers led by Kaecilius, who took some pages from one of the forbidden tomes in Kamar-Taj in the hopes of entreating Dormammu for eternal life with the power of the Dark Dimension, a realm where time did not exist. His plan slowly unfolds as he and his fellow dark sorcerers kill the guardian of the London Sanctum, weakening the universe's protection against the Dark Dimension. Dormammu's acolytes then lay siege to the New York Sanctum, but Strange, along with the sentient Cloak of Levitation, fend them off. During the battle, however, it comes to light that the Ancient One owed her supernatural age to the same forbidden magics Kaecilius and his kin sought, drawing power from the Dark Dimension. After she is mortally wounded in the battle, the Ancient One tells Strange that even he, too, may need to bend the rules to protect their world.
Kaecilius escapes to Hong Kong, where Wong laid dead and the Sanctum laid in ruins. With the Dark Dimension encroaching on Earth, the situation has grown dire, and time is running out to save the universe.
...or so it seems. With the Eye of Agamotto, Strange turns back the clock on Wong and returns him to life. He then travels directly into the Dark Dimension and confronts its ruler:
"Dormammu...I've come to bargain!"
The ensuing battle ends all too quickly, with Strange dead. Not long after, however, Strange returns...
"Dormammu, I've come to bargain!"
Dormammu is perplexed at how Strange was standing before him again, making the same demand, and kills him once again. Moments later...
"Dormammu, I've come to bargain."
And so it goes, with Dormammu killing Strange over and over again, only for Strange to return and repeat his demand. Strange explains that he used the Eye of Agamotto to cast a spell that introuced Dormammu and his timeless Dark Dimension to the concept of time, by trapping them both in an endless loop that restarts every time Strange dies. In so doing, he knowingly subjects himself to a potential eternity of painful demises, but Earth would not be encroached upon further by the Dark Dimension; a sacrifice Strange is willing to make.
The endless cycle of Strange coming to bargain, dying at Dormammu's hands, and coming back to bargain eventually becomes too maddening for Dormammu to bear, and he finally agrees to listen to Strange's demands; if Dormammu would stop encroaching on Earth and take Kaecilius and his apostles away into the Dark Dimension, and not threaten his universe any further, Strange would break the cycle.
Dormammu agrees, and the Dark Dimension's encroachment on Earth is reversed. Kaecilius and his underlings are taken away to the Dark Dimension, and Earth is spared certain destruction. Even though Strange's hands remain too damaged to practice medicine, he finally has a sense of solace as he becomes Sorcerer Supreme of the New York Sanctum Sanctorum, keeping vigil over the universe, continuing his studies, and offering his services to those seeking them, such as Thor, whose brother and father have appeared on Earth...
Not all is well, however: Mordo had grown disillusioned after learning of how the Ancient One violated the Kamar-Taj to prolong her life. Having decided that there are "too many sorcerers", he has begun to hunt down other magic users, starting with Pangborn...