Gwanbou and Tienbou grow up together in a Shaolin Temple as monks, studying the martial arts and generally getting into trouble.

Aided in their escape by their sympathetic teacher, they receive final instructions regarding the potential paths of their different personalities, with a specific warning given to Tienbou.

Having noticed the money gone, the henchmen start to chase down Little Melon, who holds her own during the fight but soon gets outnumbered and into trouble.

Gwanbou comes to her aid and defeats the gang, before Army reinforcements arrive to break up the fight and so the trio flee to escape capture.

Gwanbou shows up to confront Tienbou and rejects his offer, and after a fierce fight manages to rescue Siu-lin.

While recuperating in the countryside safehouse with the help of Siu-lin, he has a sudden epiphany that regains his mental health, and begins using natural phenomenon as inspiration to create a new style of martial arts which uses "soft" movements to offset power, speed and strength.

After a stunning series of parries and blows by Gwanbou, Tienbou is defeated and eventually killed when he falls upon a bundle of spears.

After the fight, Gwanbou parts way with Siu-lin, and returns Tienbou's ashes to the Shaolin Temple, before establishing his own school at Wudang Mountains.

A sequel, Tai Chi Boxer, was released in 1996 with Lau Shun and Yu Hai returning, albeit in different roles.