Based on the Jade Unicorn legend, the film unfolds the arc of Lu Junyi, a famed warrior, as he is drawn into the Liangshan outlaws after their chief Chao Gai is ambushed and killed by Shi Wengong [Toshio Kurosawa]. The surviving outlaws vow vengeance and, recognizing Lu Junyi’s strength, seek his help to strike back. Song Jiang and Wu Yong, the leaders of Liangshan, believe that Lu Junyi’s alliance will also win over Yan Qing [David Chiang Da-Wei], a legendary martial artist whose loyalty could tip the balance in their favor.
Wu Yong masquerades as a fortune teller to approach Lu Junyi in the northern capital, accompanied by Li Kui who is disguised as Lu Junyi’s bumbling assistant. They plant warnings of calamities unless Lu Junyi travels far to the southeast, and Lu’s skepticism collides with Yan Qing’s wary assessment of the situation. A tense encounter erupts when Li Kui is provoked into a fight with Yan Qing; Li Kui is defeated and briefly confined with Wu Yong. Wu Yong then uses reverse psychology to persuade Lu Junyi to release them. However, Li Gu, Lu Junyi’s steward, is secretly entangled with Lu’s wife and reports the outlaws’ presence to the authorities in a bid to seize Lu’s fortune. When soldiers arrive, Lu Junyi confronts them and is arrested, while Yan Qing attempts a rescue that becomes complicated by Lu Junyi’s renewed capture.
Yan Qing journeys to Liangshan to marshal assistance and, in a bold turn, robs two traveling strangers for funds. Those men are revealed to be outlaws from Liangshan, including Shi Xiu, who then goes to locate Lu Junyi. Shi Xiu’s daring rescue attempt in the market square fails, and both Lu Junyi and Shi Xiu are overwhelmed and taken into custody. The Liangshan leadership then plans a bold infiltration of the northern capital to free the prisoners. They position themselves around the execution ground and strike when the prisoners are about to be beheaded. The outlaws overpower the guards, freeing Lu Junyi and Shi Xiu, who then march home with the outlaw band. Lu Junyi kills his disloyal steward Li Gu, and his adulterous wife is slain by Yan Qing, sealing a personal and political vengeance.
As the fugitives depart, they encounter Shi Wengong and his forces, triggering a sprawling battle. Shi Wengong’s five students face Lin Chong [Elliot Ngok Wah], Li Kui, Hu Sanniang, Wu Song, and Shi Xiu, while Lu Junyi engages Shi Wengong in a duel of equal measure. The combined assault of Yan Qing and Li Kui helps turn the tide, leaving Shi Wengong gravely wounded. Seeing his defeat, Shi Wengong refuses to yield further and ultimately takes his own life. With vengeance achieved, the outlaws’ mission is complete, and they ride back to their Liangshan stronghold, the film closing on a note of hard-won triumph and restored order. Master Tseng’s circle and other figures weave through the climactic clashes, underscoring the intricate web of loyalties, betrayals, and martial prowess that define the legend.
