That evening Erskine speaks with Steve. The two bond over a bottle of Schnapps and Erskine tells how this is not his first time performing this experiment. He tells a story of being a scientist in Germany, and being ordered by Johann Schmidt to create a serum that would give a man god-like strength. Erskine created an early version of the serum he intends to use on Steve, only when Schmidt injected himself his body's skin corroded away, leaving him as a sinewy red skeleton. Undeterred by the risk, Steve agrees to follow through with the procedure.

The following morning Steve and Peggy wind their way through Brooklyn and come to a stop in front of an old antique shop. Along the way Steve points out various parts in Brooklyn where he's been beat up. She asks him why he never ran away. He responds that running away, in his mind, was an invitation for further abuse.

The two enter the antique shop, exchange pass-codes with an old woman manning the register and descend into a secret military bunker concealed within. Peggy leads Steve to the heart of the bunker where they find Dr. Erskine preparing a medical capsule along with Howard Stark, and Colonel Phillips rubbing elbows with senators and dignitaries. Steve is told to remove his shirt and sit in the capsule.

Stark describes that the procedure will first mean injecting muscle re-generators into Rogers' major muscle groups which will then be bombarded with "vita rays." Carter bids Steve good luck and joins Phillips in the overhead viewing chamber. Erskine's serum is injected into Steve's muscles and Steve is enclosed within the vita ray capsule. The capsule glows brightly, and thanks to Steve's will-power, the procedure is quickly completed. Steve exits the capsule a foot taller, and a hundred pounds heavier with solid muscle.

Everybody, including Phillips, celebrates the success of the procedure, and descends from the viewing chamber to congratulate Erskine. A lone dignitary stays behind, placing a small satchel on a chair. Moments later the viewing gallery explodes, the dignitary descends the stairs and fatally shoots Erskine. He swiftly kills the guards and flees to the street with Peggy in hot pursuit. Steve tends to a dying Erskine, who has just enough energy to point to Steve's heart; Erskine passes. Steve angrily bolts out of the bunker, onto the street.

In the street Peggy pursues the impostor, a German spy named Heinz Kruger (Richard Armitage), and easily kills his getaway driver. Kruger steals a taxi and aims to run over Peggy. Steve arrives in the nick of time, saving her from being killed by the on-coming taxi. Steve pursues the taxi on foot, running faster than a normal human can (and not suffering the fatigue even a healthy man would). He leaps onto the roof of the taxi, dodges Kruger's gunfire and the two come to a crashing stop at the Brooklyn docks.

Kruger flees to his Hydra sub, which dives underwater just as Steve arrives. Steve dives after the sub, punches a hole through the cockpit's glass and yanks Kruger to the surface. Kruger tells Steve that he is a member of Hydra and that "when one head dies, two more take it's place." He pops a fake tooth loose, and swallows it (presumably a cynade capsule). Foam bubbles from his mouth and Kruger dies.

Meanwhile, Schmidt and Dr. Zola are visited by a trio of Hitler's top commanders, tasked with inspecting Schmidt's operation. They ridicule Schmidt, saying that the Nazi party no longer takes him and Hydra seriously due to his obsession with magic and the occult and playfully refer to him as "The Red Skull", a name that infuriates Schmidt.

Schmidt takes the three to his weapons lab where they are shown his unstoppable energy weapons and a strategic map of Europe dotted with targets. One of the three notices a target hovering over Berlin and confronts Schmidt. Schmidt quickly kills the three Nazi officers. Schmidt announces that Hydra has disbanded from the Nazi party and is now enemies with the world.

The following day Phillips and Carter pick up the remains of Erskine's lab. Both are despondent because the only man able to produce the super soldier serum was Erskine. Steve is eager to go the front lines of the European Theatre but Phillips would rather he be a lab-rat than a soldier in his army. Steve is approached by a senator holding a newspaper of the prior day's events, emblazoned with a front-page photo of Steve chasing down Heinz Kruger.

Steve has become an overnight celebrity and the Senator has an idea that will be mutually beneficial. Steve is enlisted in the USO and travels around the American Midwest performing musical numbers in a shoddy red, white and blue costume while carrying a triangle-shaped shield bearing the stars-and-stripes. He takes on the name "Captain America." Captain America becomes an overnight success, spawning comic books and black and white movies. His antics drum up revenue for the USO.

Steve is soon taken overseas, to Italy, where he is to continue entertaining the troops. Upon his arrival the surly and war-torn men tease him and tell him to get lost. He is soon met by Carter, who along with Phillips, is overseeing this theater of the war. She tells him that the men are unhappy because many men from their division, the 107th, have been killed in battle. Steve realizes that Bucky was a part of the 107th and quickly runs to see Phillips.

Phillips is unable to find any man named Barnes on his casualty list and tells Steve to go back to his job as a movie star and a cheerleader. Steve asks Carter where the men, and Bucky, are being held. She shows him a map, and a Hydra weapons plant 30-40 miles behind enemy lines. Steve hastily pulls on a pair of army trousers and leather jacket over his Captain America costume, and a blue helmet with a white 'A' stamped on the front. He aims to steal a jeep and drive into Hydra's back yard, but she has a better idea.