The movies are part of a four-picture deal between Downey and Marvel.
"Iron Man" director Jon Favreau is returning to direct "Iron Man 2" and serve as executive producer on "The Avengers," which will team the guy in the metal suit with Marvel Comics heroes the Hulk, Captain America, Thor and others.
Don Cheadle is joining the "Iron Man 2" cast as Stark's ally Col. James "Rhodey" Rhodes. Cheadle replaces Terrence Howard, who played Rhodes in "Iron Man."
The Rhodes role is being expanded for the sequel, said Kevin Feige, president of Marvel Studios. In the comic books, Rhodes dons Stark's silver backup suit, which is retrofitted with heavy artillery, to become Iron Man sidekick War Machine.
"It has already become apparent as we prep the movie for production that the dynamic between Robert and Don will take `Iron Man 2' to new heights," said Kevin Feige, President of Marvel Studios.
"Iron Man" kicked off a huge summer for Hollywood with a $98.6 million opening weekend last May. The film grossed $318.3 million domestically, the year's second-biggest hit behind "The Dark Knight," which has taken in $527.4 million.
