The protagonist, 19 year old Li Xiaoyao, lives in a small fishing village on the east coast of China near present-day Suzhou. Li lost his parents at a young age and was raised by his aunt. When Li's aunt falls ill, Li embarks on a quest to seek a legendary fairy, who lives on a nearby island, for help. The fairy is called Zhao Ling'er, a 16 year old maiden who lives with her grandmother in a hidden palace on the island. Initially, Zhao is reluctant to help Li, but being an orphan herself as well, she is touched by Li's pleas and gives him some magical medicine.
Li's aunt recovers after taking the medicine. However, Li had unknowingly broken the spell concealing the location of the palace during his journey there. Zhao's enemies break into the palace and kidnap her after a bloody battle. Li finds Zhao and saves her. The duo returns to the palace to save her grandmother but fail to do so. With her dying breath, Zhao's grandmother reveals that Zhao's mother may still be alive and entrusts her granddaughter to Li's care. When they return home, Li's aunt tells her nephew to take Zhao together with him to find Zhao's mother. Li and Zhao will propose their marriage formally after they find Zhao's mother.
Suzhou and Yangzhou
Li Xiaoyao and Zhao Ling'er arrive in Suzhou. They meet Lin Yueru, the spoiled daughter of a wealthy martial artist. Initially, Li and Lin resented each other. Later, Li unexpectedly won Lin's hand in marriage in a martial arts contest and they were engaged. On the eve of the wedding, Zhao suddenly disappears. Li sets off to find Zhao, with Lin insisting that she accompanies him, much to Lin's father's displeasure.
Capital city and Mount Shu
Li Xiaoyao reunites with Zhao Ling'er briefly but they are separated again. Li's search for Zhao brings him and Lin Yueru to Mount Shu in Sichuan. The prestigious and powerful martial arts sect, Mount Shu Sect, is based on the summit of the mountain. They are also the guardians of the nearby Demon Prison Tower. Li learns that Zhao has been imprisoned inside the tower. Both Li and Lin break into the tower to rescue Zhao. They find Zhao after a dangerous descent to the lowest level of the Tower and learn of Zhao's true identity. However, the tower has no exit and the only way out is to destroy it from the inside. As the tower collapses, the trio is hit by a huge block of stone. Li and Zhao suffer grave injurie
Miao region and the finale
Li Xiaoyao and Zhao Ling'er reach Zhao's homeland of the Miao region, which has been plagued by a prolonged drought. Li befriends A Nu, the daughter of the White Miao king. The White Miao and the Black Miao are fighting over scarce water resources. Zhao successfully calls for a rainstorm and restores peace with the help of the White Miao queen and several ancient artifacts. The drought has been orchestrated by an evil Black Miao cleric and the trio confronts him. After the final battle, Zhao sacrifices herself to destroy the ancient water beast summoned by the cleric