A general’s son is taken hostage and used as leverage to free a bandit leader. The general’s other offspring, a girl named Golden Swallow, is sent to rescue the son. When the bandit gang encounter the Golden Swallow in a local inn, the prisoner negotiation escalates to bloodshed and the goons are swiftly defeated.
A local drunk beggar named Fan Da-Pei acts as Golden Swallow’s guardian angel, secretly helping her avoid being ambushed at night. That morning Fan Da-Pei, whom we now know only as "Drunken Cat" tips off Golden Swallow to the bandits whereabouts. They have occupied a Buddhist monastery. Under the guise of an acolyte, Golden Swallow penetrates the temple and confronts the man who’s taken her brother hostage. During the brawl she is injured by a deadly, poisoned dart. She escapes and is rescued in the woods by Fan who nurses her back to health. While she’s convalescing, Golden Swallow learns that Fan is actually a martial arts master and a leader of a Kung Fu society, which he otherwise keeps a secret.
The monastery is led by an evil abbot, Liao Kung, who is also a kung fu master and has allied himself with the bandits. He finds out that the beggar carries a bamboo staff, and then realises that the beggar is the former student of the same master. The abbot has in fact killed their master in order to get his bamboo staff, which was rescued by Fan Da-Pei. Now Liao Kung sees the opportunity to gain control of the staff.
Fan Da-Pei is hesitant to confront Liao Kung for two reasons. First, Liao Kung’s kung fu skills are unparalleled, and he thinks he has no chances against him, or at the very least, one of them would not survive a confrontation. Second, despite his evil ways, Liao Kung has actually done a good deed to Fan Da-Pei: he persuaded the master to accept Fan Da-Pei into the Green Wand Kung-Fu school when he was a mere homeless orphan, thus giving him a chance in life. For this reason, Fan is reluctant to fight the abbot even though Fan knows about the abbot’s criminal deeds.
In order to release the General’s son, Fan stages a prisoner exchange. During the exchange, the government soldiers receive the General’s son, but Fan prevents the bandits from releasing their leader. As the government soldiers march the bandit leader back to prison, the bandits attack the procession. Golden Swallow, leading her female warriors, fights off the bandits. The evil abbot forces a showdown with Fan Da-Pei.