Mr Mxyzptlk provides Lex Luthor with Red Kryptonite that renders Superman powerless. It takes Superman a while to work out what is responsible for his state, and in the meanwhile he is supported by Professor Hamilton, Starman and Gangbuster. Starman and Gangbuster try to keep the streets safe in Superman's absence, while Hamilton builds a power suit for Superman to use in the interim.
Starman eventually determines that Luthor is responsible for Superman's loss of power, although strangely Hamilton can't detect any radiation in the Red Kyptonite Starman brings back.
It is only by tricking Luthor into revealing his source, namely Mxyzptlk, that Superman regains his powers and Mxyzptlk is once again banished to the fifth dimension.
Mxyzptlk first met Luthor when Superman was in space (see Superman: Exile) at which Luthor inadvertently teaches the imp to lie (see Superman #31).
Mxyzptlk first gets the idea for playing around with Kryptonite during the race he enforces between Superman and Flash (Adventures of Superman #463). At this time, Mxyzptlk spots Luthor's crew seeking Kryptonite, and offers Red Kryptonite which is rejected.
Soon after Mxyzptlk disappears, Superman deals with a Kryptonian artifact called the Eradicator, which transforms his personality. Superman becomes more Kryptonian, and the identity of Clark Kent begins to be lost as he starts self-identifying as Kal-L. In the aftermath of these events, Clark realises that he values his humanity and begins a romantic relationship with Lois Lane (see The Day of the Krypton Man).
Superman is in the midst of carrying off a criminal when he loses his powers. One second he's flying, the next he's dropping into the Metropolis harbour waters powerless. Superman couldn't know it, but Luthor is behind what's happening to him. Luthor is playing a pawn in another of Mxyzptlk's game. The deal is that Luthor can have a rock of Red Kryptonite which will take away Superman's abilities as long as he never reveals to Superman where it is he got the Red Kryptonite from.
This is a deal Luthor's more than happy to make. He's been waiting years to make Superman suffer, to make up for all the humiliation he's caused him. Superman does suspect Luthor, and goes looking for him. Finally, Luthor thinks, the time has come to humiliate Superman. Luthor beats up the man of steel before having him cast out of Lexcorp.
Without his powers it is harder than ever for Superman to follow up on his mysterious loss of powers. And if that weren't bad enough, Superman must do everything he can to keep the news of his limitations off the street; Metropolis' criminals would riot if they knew how vulnerable the city suddenly was.
The first idea Superman has is to enlist the help of Starman, using the latter's solar rays to recharge Superman's powers. Unfortunately not only does the plan not work, but Superman is all them more battered for trying. Starman continues to help Superman, first by impersonating him in Metropolis, thus quashing rumours, and secondly by seeking out Luthor who everyone agrees must somehow be involved.
Luthor is shocked to see Superman flying - although of course it's actually Starman in disguise - and Starman snatches the Red Kryptonite away from the billionaire to be taken back to Hamilton's lab for study.
Unlike the Green Kryptonite with which Superman is unfortunately all too well familiar, this Red Kryptonite doesn't seem to be emitting any radiation. But if it's not emitting any radiation then how could it possibly be affecting Superman so strongly? The nonsensical nature of it all is the final clue: Superman, of course, is vulnerable to magic and it must be the case that somehow magic is involved in this too.
Once again Superman visits Lexcorp, hoping for answers, but this time he wears the guise of Clark Kent. What's more, he comes bearing gifts: the Red Kryptonite. The deal is that if Luthor will give him an interview then Clark will return the Red Kryptonite he's chanced upon. Luthor of course agrees, but doesn't realise that in revealing to Kent the source of the crimson rock that he's negating the terms of his agreement with Mxyzptlk.
Once again Mxyzptlk loses in his own game while Superman regains his powers.
Superman may have regained his powers, but he's still living the double life of Clark Kent, and Kent's starting to fall for Lois. Maybe it's his recent brush with the inhumanity of Krypton, and maybe it's the sudden vulnerability he's been exposed to, in any case, Clark decides that it's time: Clark proposes to Lois!
The most significant aftermath of this story regards the blossoming relationship of Clark and Lois. The last issue of this arc ends with Kent's proposal being accepted, and is directly followed up in Adventures of Superman #473 as they share the news with all their friends.
The after-effects of the proposal have ramifications all the way down to the Wedding and Beyond storyline, and well past that.
Effect on Superman mythology
Although Red Kryptonite made a frequent appearance in silver age Superman stories, this is it's first appearance in the post-Crisis timeline. In this timeline, it was decided that there should only be - at least in the main - Green Kryptonite, and that it should not be too plentiful.
The Red Kryptonite as it appears in this storyline is uniquely different from it's pre-Crisis analogue. Red Kryptonite here is a product of Mxyzptlk and it's actions depend directly on that imp's magic. By comparison, in the pre-Crisis timeline the Red Kryptonite was a product of Green Kryptonite and hence could be found on Earth.