Following the events of the first film, Ning (Leslie Cheung) parts ways with the Taoist Yin (Wu Ma) and returns to his home village, which has since fallen on desperate times.

Sharing a cell with Elder Chu, a renowned scholar, Ning apparently spends months languishing in prison.

After a short skirmish, the rebel sisters Windy (Joey Wong) and Moon (Michelle Reis) discover Elder Chu's pendant.

The sisters explain that their father, Lord Fu (Lau Siu-Ming), was framed for a crime and is now being transported to the place of his execution.

He emerges at daybreak on a dirt road, causing an altercation with an imperial convoy led by Hu (Waise Lee).

Autumn uses his powers to cause the corpse-demon's head and body, which are now fighting independently as separate units, to violently explode, thus killing the demon.

The Imperial High Monk assumes the form of a giant false buddha statue, and shoots lethal rays of golden energy, killing two group members on the spot.

The explosion is rebuffed by the evil false buddha and magically displaced, causing the group, including Autumn, to fly up into the air instead.

Autumn gestures, shifting the cosmic forces of heaven and earth in order to issue a vortex of dark energy, but this attack is easily negated by the evil false buddha as well.

Ning runs down from his inn to the main street and tells Moon that he wishes Windy a long, happy marriage before leaving.

In 2019, the theme song of A Chinese Ghost Story II, "人間道" ("A Human's Path"), was pulled from Apple Music in China due to its association with the Tiananmen Square Massacre.

The song was pulled from the streaming service after users of Weibo pointed out that the lyrics were a veiled reference to the bloody 1989 incident, which saw the Chinese military violently disperse unarmed pro-democracy student protesters who were occupying the famous square, killing hundreds.