Li Xiaoyao, the protagonist of the game, is an orphan who lives with his aunt in a small fishing village near Suzhou, China. When his aunt falls sick, Li travels across the sea to a mystical island in search of a cure for his aunt. He meets a maiden Zhao Ling'er, whom he falls in love with. Forced by Zhao's nanny to marry Zhao and remain on the island forever, he manages to escape with the medicine and succeeds in healing his aunt. However, he loses the memory of his encounter on the island after being tricked into consuming a memory-erasing drug. He meets Zhao again, saving her from a group of enemies, who have destroyed her home and murdered her nanny. He then decides to accompany her to southwestern China in search of her mother, who might still be alive.
Li and Zhao arrive in Suzhou and meet Lin Yueru, the spoiled daughter of a wealthy martial artist. Li unexpectedly defeats Lin in a martial arts contest and wins her hand in marriage. When Li shows reluctance to marry Lin, her father threatens to kill him if he does not marry her, so Li pretends to agree, but plans to escape later. On their wedding night, a giant serpent is sighted and Zhao disappears under mysterious circumstances. Li and Lin believe that Zhao has been captured by a monster, so they set off in search of her and arrive in Sichuan, where the Mount Shu Sect, a powerful martial arts clan, is based. They learn that Zhao is actually a half-serpent spirit and has been imprisoned in the Demon Prison Tower by the Mount Shu elders. Li and Lin break into the tower and succeed in rescuing Zhao after making a perilous descent to its lowest level. However, they all suffer grave injuries when the tower collapses while they are escaping from it.
The trio are saved by an herbal medicine guru, who tells Li that Zhao is pregnant with his child, and that Lin has died from her wounds. Li is deeply saddened by Lin's death, but he puts aside his grief because he has a more important mission to complete: find two rare items which can save the lives of Zhao and their unborn baby. Li's quest takes him to southwestern China, where the Miao people live. He meets and befriends Anu, a White Miao princess, who tells him the history of her homeland. The Miao land has been affected by a prolonged drought and the White and Black Miao are at war with each other over scarce resources. Li completes his mission and Zhao recovers, after which she summons a rainstorm and restores peace to the Miao land. Through their adventures, Li, Zhao and Anu discover that the drought was actually caused by an evil Black Miao cleric. They confront him and defeat him in a battle. During the battle, Zhao sacrifices herself to destroy an ancient water monster summoned by the cleric.
Li is traumatised by the loss of Zhao and Lin. He bids Anu farewell and walks away alone. Just then, he sees Lin, carrying his child. Lin's reappearance at the end of the game is often disputed, but the official story released by Softstar Entertainment claims that Lin is dead and cannot be resurrected. However, her body may be brought back to life, but she will never be the same as before because her soul is dead.
