A Wudan Warrior Lu Mu Bai gives his sword "The Green Destiny" to his friend Yu Shu Lien, who is to deliever it to another friend of Lu Mu Bai's, as Lu feels that the sword has too many memories around it. Yu Shu Lien delivers it and whilst staying there meets Jen Yu, a princess soon to be given away in an arranged marriage.
That night the sword is stolen by a masked warrior, who Yu Shu Lien identifies as Jen Yu. Lu Mu Bai arrives and discovers Jade Fox, the woman who killed his master and stole the book of the Wudan is training Jen Yu. Lu Mu Bai decides that he should train Jen Yu in the way of the Wudan, but Jen rejects this.
Meanwhile, a man arrives at the house looking for Jen. His name is Lo, and we find out that he and Jen are in love, ever since he and his gang attacked her convoy moving through the desert and he stole her comb. They stayed in the desert together for a while, but she had to leave him to return to her family. He wants her to return to the desert with him.
Lu Mu Bai and Yu Shu Lien are both secretly in love with each other, but neither tell each other this in respect to Yu Shu Lien's dead fiance, who was Lu Mu Bai's friend.
Overall this movie is about true love. Lu Mu Bai and Yu Shu Lien have yet to tell each other, whilst Jen and Lo need to overcome social status and pride to be.
Revealing mistake: Just after Li Mu Bai tells Shu Lien that they are very close to her headquarters and that she should check in, we are treated to two 'time pass' shots of forest. The second of these features some very obvious power or telephone lines in the lower right corner of the screen. (01:22:40)
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