The film is based on the story of Lam Sai-wing, one of the students of the legendary Chinese folk hero Wong Fei-hung.

The Magnificent Butcher was produced as Hung's attempt to duplicate the success of Yuen's 1978 martial arts action comedy film Drunken Master, which also featured the characters of Wong and Beggar So.

Butcher Wing's long-lost brother Lam Sai-kwong (Chiang Kam) comes to town with his beautiful wife Yuet-mei (Tong Ching).

Wong Fei-hung goes out of town, and leaves Butcher Wing and the other disciples, including Leung Foon (Yuen Biao) and Chat (Wei Pai), to fend for themselves.

A despondent Sai-kwong decides to commit suicide but is saved by the wily drunkard Beggar So (Fan Mei Sheng), an old friend of Wong Fei-hung with equally good kung fu skills.

For the sake of inconveniencing Butcher Wing, Lan-hsing insists on staying at his house that night, claiming to be homeless and feigning an injury that leaves her unable to walk.

Leung Foon and Chat take the dying Butcher Wing to Beggar So, who successfully treats his injuries and critiques his kung fu.

Butcher Wing asking the old man to teach him how to improve his kung fu, he is made to undergo rigorous training.

In the morning, Master Ko was upset about his son's death and sets up Tai-hoi's funeral in the town square and waits for Butcher Wing, who will come that way.

However, elder Yuen died of heart attack before The Magnificent Butcher's production began and was replaced by Fan Mei-sheng.

"[2] J. Doyle Wallis of DVD Talk rated it 3.5/5 stars and wrote, "Typical of the time, it is part of the standard and formulaic Drunken Master comedy/action clones, though, it is one of the better ones.

"[3] Bill Gibron of DVD Talk rated it 93/100 and wrote, "Even though it ends too abruptly and takes a little while to get started, The Magnificent Butcher is still one of the best old-fashioned martial arts movies ever made".