Besides directing Mad Monkey Kung Fu, Lau Kar-Leung, (also known as Liu Chia-liang) plays the lead character who is crippled by the villain in a devious plot that defames the martial arts master.

Years pass by, and after the tragedy that befell he and his sister, Chen comes to terms with his alcoholism, and maintains a life of sobriety.

Chen also gives up opera performing and practicing monkey style Kung Fu, as he is haunted by a regret and shame that he is to blame for his sister's life due to his previous inability to maintain sobriety.

Chen struggles as a street entertainer and candy salesman (now somewhat of a local celebrity due to his kind and giving nature) to make ends meet, performing with his beloved trained monkey Ah Mao.

Monkey cracks up a plan to steal back the money that the extortionists had taken from Chen and gift him with a warm meal for dinner.

Chen pities the young man and the bad card he's been dealt in life, and offers him respite in his home for the night, allowing Monkey to sleep alongside Ah Mao.

The following day, the local thugs again attempt to extort what little money Chen earns from selling candies and doing street entertainment shows with Ah Mao.

The extortionists throw Chen's candies across the town square again to distract him, then brutally murder Ah Mao, swinging him in circles from his leash and smashing the small monkey against a tree.

Months later, although the training is not quite complete, Monkey believes he is strong enough to defeat not only the extortionists, but the boss they work for, and leaves Master Chen to enact his revenge against them all.

Monkey is led to the extortionist's boss, an older man who runs the local brothel and happens to be, the villainous Tuan.

Monkey, eager to get revenge steps in to take his master's place and be his hands, and quickly turns the tables on the villainous Tuan.

As Monkey fights Tuan by himself, his focus grows, and while calm and collected he clearly outclasses the older man with his youth, let alone sheer skill in martial arts.

Chen watches on and excuses the aggressive action as he believes justice has been served, though before he can intervene, Monkey still fueled by rage and not forgetting the lives lost at the hands of Tuan, drags him up a tall balcony in the brothel and jumps off, leaving Tuan to fall to his death on the concrete floor at Chen's feet.

As Monkey jumps up to teach them a lesson as well, Chen catches him and calms his rage, leaving the brothel and ending their quest of revenge.