Rocky strolls down a long sidewalk lined by a metal fence - toward the local gym where he has been boxing for six years. Mighty Mick's Boxing establishment is filled with amateur boxers punching bags, skipping rope, sparring with partners, and exercising. In the dingy locker room, Rocky fails to unlock the combination lock on his accustomed locker. After a few unsuccessful attempts (and the use of a combination cheatsheet that he hides in his hat), Rocky smashes it open with a fire extinguisher. But inside, there are pictures of a black boxer's lady friend and flashy clothes. After demanding an explanation, he learns from attendant Mike (Jimmy Gambina) that it isn't his locker "no more" after it was given to up-and-coming boxer Dipper (Stan Shaw). With orders from the gym manager Mickey Goldmill (Burgess Meredith), Rocky's gear has been bagged and hung on a hook "on Skid Row."

The weathered, tough-talking, aging, white-haired, crusty old Mickey is coaching the young, muscular black fighter Dipper and is disgusted with Rocky's poor training habits and lack of ambition to be a great fighter:

Mickey: Dipper's a contender. He's a climber. You know what you are?
Rocky: What?
Mickey: You're a tomato.
Rocky: A tomato?
Mickey: Yeah, let's face it. I run a business here, not a god-damn soup kitchen.

And Mickey isn't impressed that Rocky, a once-promising fighter, knocked out a nickel-and-dime opponent Rico in the second round: "He's a bum." He also criticizes Rocky's fighting style with an expert eye. He recognizes that Rocky's main ability is to take a lot of punches and punishment, without any boxing finesse. Mickey suggests that he give up and retire early:

You got heart, but you fight like a god-damn ape. The only thing special about you is ya never got your nose busted - well, leave it that way, nice and pretty, and what's left of your mind...Hey kid, did ya ever think about retirin'?...You think about it.

That cold winter evening on his way home, Rocky visits again with Adrian in the pet shop, where she is cleaning a bird cage filled with parakeets - Rocky thinks they "look like flying candy." He invites her to go to a local basketball game at the Spectrum, but she is so retiring that she can't answer. As he does quite often, Rocky downplays what happens to him and confesses that losing his locker earlier that day didn't bother him: "Lockers are bad anyway after a while, people get the combination. I must have had twenty bucks taken out of there in the past six years, ya know. Don't sound like much, but it adds up, ya know. Doesn't matter, who cares?" Speaking through the bird cage (the metal bars separate - or imprison - them), he offers to walk Adrian home, but she declines. As he leaves, he promises her that he'll go home and think up a new joke for her. When he departs, the mousy clerk manages to offer him a 'goodbye.'

Heading toward home, Rocky drags a wino passed out on the street into the shelter of the Lucky Seven Tavern - another instance of his caring and kindness. In the smelly, decrepit men's room of the bar, he finds one of his buddies, meatpacker Paulie (Burt Young), shaving in front of a broken non-existent mirror. He asks Paulie why his sister Adrian won't go on a date with him: "Your sister's givin' me the shoulder." He thinks that she looks at him like he was "a plate of left-overs...Is somethin' wrong with my face, you know what I mean?" Paulie degrades his sister and pummels her self-image. He regards Adrian as a loser that Rocky shouldn't even waste his time on:

Forget her...You could do better than her...She's a friggin' loser...Sometimes she gets me so crazy, I could split her head with a razor...Adrian ain't sharp. Adrian is a loser...She's pushin' thirty-friggin' years old and if she don't watch out, she's gonna end up dyin' alone...The girl's dryin' up...If she don't start livin', her body's gonna dry up.

As Paulie leaves, he reminds Rocky to recommend him to Gazzo for a job on the docks, but Rocky discourages him. (Rocky's debt-collector job is not even a sure thing for himself, and he fears risking his own precarious occupation and major source of income by recommending the loud-mouth drunk Paulie.) Rocky is invited to Paulie's place the next night for "some bird" on Thanksgiving - and to talk to Adrian. (Paulie's motivation is to offer up his sister with the promise of romance, in exchange for being referred to the loan-shark.)

At the bar, Rocky watches the evening sportscast on television - an interview with the reigning World Heavyweight boxing champ - a flamboyant, arrogant black fighter (Muhammed Ali-inspired) named Apollo Creed (football star Carl Weathers), about an upcoming, much-publicized 'Bicentennial Fight' between Creed and Mac Lee Green at the Spectrum:

This is gonna be the greatest sporting event in the country's history - a gala occurrence with me beatin' Green like he committed a crime. The Heavyweight Championship of the World is gonna be held in the only place it can be held, Philadelphia, the nation's cradle on January 1st - the first major event of our two-hundred year history.

The talkative Apollo advises young people with a clever rhyme [like his poetic predecessor Muhammed Ali]: "Stay in school and use your brain. Be a doctor, be a lawyer, carry a leather briefcase. Forget about sports as a profession. Sports make ya grunt and smell. See, be a thinker, not a stinker." No boxer has ever gone more than 12 rounds against Creed. During the entire broadcast, Andy the bartender (Don Sherman) speaks over the interview and criticizes the showy Creed, but Rocky takes offense:

Andy: Will you take a look at that guy? I mean, where are the real fighters gonna come from, the pros? What we got today are jig clowns.
Rocky: Clown?
Andy: That's right, clown.
Rocky: Ya callin' Apollo Creed a clown?
Andy: Well, what else, look at him.
Rocky: Hey, Andy, are you crazy? This man is champion of the world. He took his best shot and become champ. Huh? What shot did you ever take?
Andy: Hey, Rocky, you're not happy with your life. It's nice. But me, I've got a business going, I don't have to take no shots.

As Rocky passes Tony's Food Market on his way home that night, one of the teenagers (Christopher Avildsen) hanging around on the street corner asks him to buy a bottle of wine, but he refuses ("No wine, bad for your brain"). He spots a young, twelve year-old girl named Marie (Jodi Letizia) - smoking, swearing ("Screw you, yo yo"), and acting tough. When she talks back and attempts to impress her friends, he pulls her away and escorts her home, while lecturing her about getting a reputation as a foul-mouthed whore who hangs out with the wrong crowd ("coconuts on the corner"):

...that's the way guys are. They laugh when ya talk dirty. They think you're cute. But after awhile, you get a reputation and that's it. You get no respect. Ya understand? Ya get no respect. I gotta use a bad word - WHORE...You don't really have to be one, you just act like one and that's it...They don't remember you, they remember the rep(utation)...You hang out with nice people, you get nice friends, ya understand? You hang out with smart people, you get smart friends. You hang out with yo-yo's, you get yo-yo friends. You see, simple mathematics.

When they come close to her house, Rocky feels that he's done a good deed, but she crudely flips him off with a retort: "Screw you, Creepo." He is truly shocked by her reaction as he slumps down and walks off, muttering: "Yeah, who are you to give advice, Creepo?"

Thursday - Thanksgiving Day 1975

In the offices of Miles Jergens (Thayer David), a successful fight promoter, Apollo Creed is dismayed by doctor's reports on challenger Mac Lee Green's injured hand - the fighter has a "severely cracked third metacarpel in his left hand." Jergens proposes cancelling the Bicentennial fight indefinitely, while Apollo, his lawyer and his trainer Duke (Tony Burton) threaten that he must fight a "ranked contender." They all vow: "He's not gonna be embarrassed." According to Jergens, all worthwhile contenders have replied that five weeks is too short a notice to get in shape. Apollo thinks that most fighters are scared of him: "They're makin' excuses so they don't have to be the chump that gets whipped in front of the whole civilized world." Then Apollo comes up with a brand new "novelty" or scheme - to find an underdog, local Philadelphia fighter who will be given a once-in-a-lifetime opportunity to fight in the hyped championship in "the land of opportunity":

Apollo: A snow-white underdog, and I'm gonna put his face on this poster with me. And I tell ya why. Because I'm sentimental. And a lot of other people in this country are just as sentimental, and they're nothin' they'd like better than to see Apollo Creed give a local Philadelphia boy a shot at the greatest title in the world on this country's biggest birthday. [Is he referring to July 4th, or to January 1st - the actual day of the bout?] Now that's the way I see it. And that's the way it's gonna be!
Jergens: Apollo, I like it. It's very American.
Apollo: No, Jergens, it's very smart.

Rocky is making his rounds to strong-arm "two yards from Cappoli and a grand from Snyder." Gazzo asks Rocky about the girl he's going out with "tomorrow night." [If the story is consistently being told chronologically, it is Thanksgiving day, but Gazzo's statement that the date is "tomorrow night" is wrong.] Buddy kids Rocky about his date with Paulie's sister, calling her "retarded," but Rocky claims she's only "shy." Gazzo slips Rocky a fifty-dollar bill so that he can have "a nice time" with Adrian.

Back in Jergens' office, Apollo looks through record books of the boxing registry, and finally chooses an obscure candidate for the fight - southpaw Rocky Balboa. When other boxing contenders refuse to take the challenge with such short notice, Creed chooses the unknown, no-hope Rocky to be his opponent for the public-relations January 1st event. Creed's decision is based on his belief that America was discovered by an Italian [Christopher Columbus], and because of the great marquee potential of Rocky's dramatic nickname:

This is what I'm looking for. 'The Italian Stallion.'...Look, it's the name, man. 'The Italian Stallion.' The media'll eat it up. Now who discovered America? An Italian, right? What would be better than to get it on with one of his descendants...Southpaw, nuthin'. I'll drop him in three. APOLLO CREED MEETS THE ITALIAN STALLION. Sounds like a damn monster movie.