After attaining a form of lesser godhood, Zhang Diaoxian believes that his newfound power is not sufficient. He takes control of the city of Hu, compelling its citizens to worship him unconditionally. As events unfold, it becomes evident that not every demon in Hell deserves to remain in their current state. Many lesser demons aspire for redemption rather than wishing harm upon humanity, yet they must adhere to Diaoxian's cruel directives to avoid retribution from his stubborn demon-slayers. In a twist of fate, Zhong Kui, a local scholar, is manipulated by Diaoxian, transforming him into a formidable "pseudo-demon" capable of exterminating demons more effectively.
With a masterful façade, Diaoxian earns the trust of the people in Hu, enabling him to disguise his ulterior motives from both the townsfolk and the divine beings—and ultimately plotting to steal the coveted Dark Crystal from Hell. His grand scheme is to depose the celestial pantheon and rewrite reality itself, even if it means annihilating Hell and obliterating the souls of all innocents in Hu to achieve his ambition.
Interestingly, the current "Demon King" in Hell, the realm closest to Hu, once served as one of Diaoxian's tools, akin to Kui’s present status. Betrayed by Diaoxian leading to their demotion to demonhood and banishment to Hell, the Demon King seeks a moment when realms converge to reclaim the Dark Crystal, hoping to use it to expose Diaoxian and redeem his kin.
Three years earlier, a snow demon known as "Little Snow" encountered a younger Kui, initially intending to seduce him but ultimately succumbing to her own affection for him. Their romance, however, took a painful turn when Kui asserted that humans and demons could never be united, prompting her to return to Hell. Following her departure, Kui excelled in the imperial examinations but lost his honors due to corruption, leading him to a tragic end by suicide. Diaoxian resurrected Kui, gifting him a magical elixir to instill a false belief that he remained a living human, rather than a hybrid of human and demon.
Now, three years later, Kui is grappling with his new powers as a "pseudo-demon" and is tasked with retrieving the Dark Crystal under Diaoxian's command. The Demon King assembles his followers, alongside genuine demons, to mount an attack on the city of Hu in a desperate attempt to reclaim the crystal before Diaoxian's nefarious plans reach fruition. However, the initial onslaught of genuine demons falls short, as they lack the strength to withstand the demon slayers, leading the Demon King to revive Little Snow to assist in this endeavor.
To create distraction, the Demon Sisters infiltrate Hu disguised as traveling entertainers, hoping to seduce the townsfolk into indulgence, rendering them neglectful in protecting Diaoxian’s crystal. Amidst the chaos, a suspicious Kui pretends to succumb to drunkenness to get closer to the sisters, attempting to unveil their true forms. Despite his initial efforts failing, Kui encounters Snow, and their past affections reignite as they attempt to navigate the turmoil surrounding them. Their tender moment is abruptly interrupted when the other sisters grow impatient, spurring them towards a reckless attempt to snatch the crystal, thus awakening a mystical fox guardian.
Amidst the commotion, Kui discovers Snow separated from the others; a heated confrontation ensues between them, resulting in a clash of loyalties. When Diaoxian arrives, he easily bests the demon girls, and Snow faces dire repercussions. Motivated by a sense of justice, Snow defies Diaoxian, though this leads to severe consequences for her and her sisters, as they are subjected to imprisonment while he manipulates public sentiment against them.
In a climactic scene, Snow ventures out to rescue her sisters but is swiftly subdued by Diaoxian. The villain demands Kui execute Snow publicly for humiliating him, yet Kui, torn by his love, refuses to comply despite being grievously injured. As the Demon King's forces rally to rescue them, Kui's transformation into his demon persona allows him to grasp the underlying motives of the demon girls, culminating in a shift in his loyalty away from Diaoxian.
After a series of betrayals and revelations, Kui learns the extent of Diaoxian's villainy and attempts to reveal him to the townsfolk. However, he is met with hostility and betrayal, igniting Kui's demon power. Despondent, he escapes with Snow following closely as they rally their forces for a decisive confrontation against Diaoxian.
In an epic showdown, with Snow's strength swiftly declining under Diaoxian's influence, Kui ultimately confronts Diaoxian. Fueled by rage over the treatment of his beloved, he capitalizes on Diaoxian's weakened state after a fierce battle, striking a final blow that seemingly defeats him. Unfortunately, Snow's imprisonment in a crystal leaves her vulnerable, and as she vanishes into a weakened spirit form, Kui faces the daunting task of bringing her back.
With time running out, Kui harnesses the Dark Crystal to restore balance and free the spirits trapped by Diaoxian. The once disillusioned residents of Hu gradually realize the truth, aiding Kui in his quest against Diaoxian. In a heartwarming conclusion, Kui places the Dark Crystal back in its rightful place, leading to an appearance by the Jade Emperor, who urges Kui to reincarnate, hinting at future adventures as he plunges into the depths of Hell, aiming for a reunion with Snow.
