Little monk Shifang (played by Tony Leung) accompanies his master, Baiyun (played by Liu Xun), to escort the Golden Buddha to Mount Wutai. On the way, they encounter the rogue Taoist Yan Chixia (played by Jacky Cheung), who kills countless bandits, and the three become enemies. Shifang and his master spend the night at the haunted temple of Lanruo. While the master goes out to scout, Shifang meets the female ghost Xiao Zhuo (played by Joey Wong). Shifang resists her temptation, and the two fight; Shifang chants a spell and subdues her, but still kindly lets her go. Shifang accidentally loses the Golden Buddha, and when he finds it again, it has broken into two pieces. The tree demon Grandma seizes the opportunity to attack, and Baiyun is captured alive. With Xiao Zhuo's help, Shifang escapes and seeks help to repair the Golden Buddha, but unfortunately gets cheated. Luckily, he meets the little Taoist Yan Yixia again, who offers assistance. Xiao Zhuo's mortal enemy, Xiao Die (played by Lizhi), attempts to seduce the two but fails, and in her anger, she uncovers Xiao Zhuo and Shifang's plan, leading Grandma to their hiding place. Shifang escapes again with Xiao Zhuo's help and rescues his master, but Xiao Zhuo is captured and tortured by Grandma. Shifang and Yan Chixia dig up Xiao Zhuo's ashes to escape from Lanruo Temple, but Grandma has already set a trap, putting everyone in great danger. At the last moment, Shifang transforms into the golden body of the Buddha to confront the tree demon...