In 19th century Qing Dynasty China, a warrior gives his sword, Green Destiny, to his lover to deliver to safe keeping, but it is stolen, and the chase is on to find it. The search leads to the House of Yu where the story takes on a whole different level.
Crouching Tiger Hidden Dragon is a timeless story that takes place in QING China when miracles were credible and spirits and gods were present in man's world. It is not unbelievable that zen warriors float through the air, skim the water and battle in trees and on rooftops. Pain, revenge and duty are the stuff that bind us in this world and are the main plot line of the movie, but in the afterlife love and faith linger on.
Li is a great warrior, famous throughout QING China for his adventurus life. He decides to give his powerful, ancient sword as a gift to an old friend of his, but soon the sword is stolen by a mysterious master of the martial arts. Now, it's up to Li to uncover the thief and return the sword to its rightful owner.
Li Mu Bai, a great warrior decides to turn in his sword, the Green Destiny to a treasured friend. When the sword is then stolen, it is up to him to retrieve it. At the same time he is trying to avenge his master's death by the evil Jade Fox. He is joined in his quest by Shu Lien, the un-conceded love of his life. During all of this, they are introduced to Jiao Long Yu, the mysterious and beautiful daughter of a well known family. She is the mysterious link to all these tales. But through all the many subplots, this is in essence, a love story.
A young Chinese warrior steals a sword from a famed swordsman and then escapes into a world of romantic adventure with a mysterious man in the frontier of the nation.
Set in a distant time in China, the movie tells the story of Master Li Mu Bai (Yun-Fat Chow), an accomplished swordsman and martial artist. His sword, the Green Destiny, is renowned for its grace and superiority in a fight. However, Mu Bai wishes to leave the ways of the warrior behind him and asks his friend, Yu Shu Lien (Michelle Yeoh) to take the sword and present it as a gift to their friend, Sir Te (Sihung Lung). Mu Bai explains that the sword holds too many memories of the past and he wishes to retire in peace. Shu Lien is a skilled warrior like Mu Bai and harbors feelings for him which he reciprocates, but does not act on due to the fact that Shu Lien was widowed by Mu Bai's best friend.
At his estate, Sir Te accepts the grand gift and places it in a decorative case. Shu Lien also meets Jen (Ziyi Zhang), the daughter of a Manchurian governor, who is set for an arranged marriage. Despite her upbringing, Jen is inquisitive and seems envious of Shu Lien's status as a free warrior. That night, a thief dressed in black sneaks into Sir Te's study and steals the Green Destiny. An alarm is raised and the thief is chased over rooftops, pursued by Shu Lien, both of them demonstrating high skill in Wudang technique. The two engage in combat but the thief manages to escape.
Shu Lien has her suspicions about who the thief may have been and tells Mu Bai about the theft when he arrives at Sir Te's estate. Surprised at his arrival, Shu Lien is nonetheless grateful to his help. It is implied that Mu Bai's intentions were to be close to Shu Lien. With the help of Bo (Xian Gao), Sir Te's servant, Mu Bai and Shu Lien silently investigate the theft and discover that it originated within Governor Yu's (Fa Zeng Li) compound and that none other than the infamous bandit, Jade Fox (Pei-Pei Cheng), is hiding out there. Mu Bai knows Fox well; she was the lover of his master who sought to learn Wudang from him. When he refused to teach her because of her status as a woman, she killed him and fled.
Bo meets an undercover policeman (De Ming Wang) and his daughter, May (Li Li), who have been tracking Jade Fox. Inspector Tsai explains that his wife was murdered by Fox who now hides in plain sight as Jen Yu's governess. While the three of them are conversing during the day, May and her father sharpening their weapons, a dart is shot into their quarters with a message attached to it. Jade Fox challenges them to a showdown that night. That night, they hide in the shadows of a courtyard, weapons ready, until they see a hobbling old woman crossing the courtyard. They command that she reveal herself and Jade Fox stands straight, insulting them and brandishing her own weapons. The four fight, with Bo often getting in the way as he is not a skilled fighter. Tsai and his daughter seem on the verge of defeat when Mu Bai arrives and engages Jade Fox. His attack is diverted, however, by the thief in black. Fox addresses her as her apprentice, confident now that the battle is won. Mu Bai engages the thief alone while Tsai and the others fight Fox, three to one. The thief fights Mu Bai with his own Green Destiny, but he is impressed with her skills and energy. Tsai, meanwhile, is overpowered by Fox and is killed while Bo is paralyzed with a chi-blocking attack. May mourns the loss of her father as Fox and the thief flee.
The next day, Jen is told by Shu Lien that a fight occurred the night before with Jade Fox and that an undercover policeman was killed. Jen is affected by this news and it is revealed that she is the thief in black who stole the Green Destiny. Guilt-ridden, she decides to return the sword that night but is intercepted by Mu Bai who offers to become her teacher in Wudang. Jen angrily rejects his offer and leaves. Back at the governor's compound, Jen confronts Fox about killing the policeman and banishes her from her quarters. A bandit is seen scaling the rooftops and avoiding the guards set out for the governor. He sneaks into Jen's quarters and it is immediately shown that they know each other. Lo (Chen Chang) asks Jen to come away with him to the desert and a flashback reveals how they first met.
Crossing the desert in a caravan, Jen watches the unchanging landscape beside her mother, holding a white hair comb. Suddenly, the caravan is attacked by a group of bandits. Jen's mother faints while she watches. A young man on a horse, Lo, appears and snatches the comb from Jens hand. Angered, Jen leaves the safety of her coach and begins to fight the bandits. Lo, impressed with her skill and anger, leads her on horseback into the desert, baiting her with the comb. They stop for water but Jen continues to fight until she knocks Lo out and collapses from the heat. When she wakes up, she finds herself in a large cave where Lo apparently lives. He allows her to bathe herself and tells her that he will sing so she always knows where he is. As he is cooking outside, Jen hits him over the head with a pot before escaping on horseback. But the desert is vast and soon the horse dies and Jen continues on foot until she collapses. She wakes up some time later, tied up and back in the cave. Lo had tracked her down and tied her up so she couldn't hit him again. But over time, they fall in love and Lo takes her to a settlement in the mountains. They notice in the distance that Jen's family is trying to locate her and Lo convinces her to return to them, saying that he would do the same for a missing daughter. He tells her the story of a man who climbed to the top of a mountain where it was rumored that, if you made a wish and then jumped off the mountain, your wish would come true. He wished for his sick family to be well again and jumped off. His wish came true and, because his heart was pure, he didn't die. Jen and Lo share an intimate moment before she leaves, giving him her comb.
Back in the present, Jen refuses to leave with Lo. Heartbroken, he gives her back her comb before leaving. It's clear she is upset as well. The next day after the wedding ceremony, Lo interrupts the convoy that is carrying Jen dressed in her wedding outfit. He shouts at her, begging her to go back to the desert with him. He escapes the guards but is cornered by Mu Bai and Shu Lien. Mu Bai thinks, at first, that Lo is with Jade Fox but Shu Lien sees his innocence and takes him with them somewhere else. Lo tells them that Jen belongs to him and Shu Lien responds that getting himself killed will be no way to show his love. He must wait and they will see what they can do. Lo reluctantly agrees.
Later on, the Green Destiny is missing again, along with Jen who has apparently run away. She is seen traveling on the road dressed in unassuming clothes. When she grabs the wrist of a waitress, demanding that her cup be cleaned, she draws the attention of a couple of thugs who boast about their strength and fighting abilities. Jen displays a quick and harmless display of her skills with the Green Destiny which incites the thugs to ask if she knows Li Mu Bai. She replies that he is her defeated foe. Word spreads around the inn of Jen's shady character and many of the patrons think it would be best if she left, or they will fight her. Angered, Jen unleashes her fury on the inn leaving most of it in shambles. Mu Bai and Shu Lien arrive soon after and learn of the fight.
Shu Lien takes residence at a nearby Wudang temple only to be joined soon after by Jen, who affectionately calls her sister, referencing their friendship. They talk, but issues regarding the wedding and Jen's decision to run away anger her and she begins to fight Shu Lien. The fight ends when Jen wounds Shu Lien and Mu Bai appears, yelling that Jen has no right to wield the Green Destiny. Jen escapes the temple to a bamboo forest, followed by Mu Bai. After a brief chase they stop at the edge of a small waterfall where Mu Bai is able to temporarily break Jens emotional barriers, touching her gingerly on the forehead. He expresses his wish to train her again, sensing that she is confused and stubborn. She agrees to train with him only if he can take the Green Destiny from her in less than a few moves. Mu Bai does so with ease and Jen yells her frustration. Mu Bai does not believe she needs the Green Destiny and tosses it over the falls. Jen leaps off the falls and dives after the sword. Before Mu Bai can react, Jade Fox swoops in and carries Jens unconscious body away.
She takes Jen to her hideout in the hills and tells her to rest and secretly places strong, smoking herbs in a jar before leaving. Jen awakens some time later, dazed, and stumbles to a flooded portion of the cave where rainwater is falling. She drinks some of the water before noticing Mu Bai entering the cave; he has followed them. Jen stumbles into his arms and he takes her back to her bed, knocking the herb jar away. He revives her and asks where Jade Fox is. Suddenly, Fox appears, screaming, and shoots a flurry of poisonous barbs towards them. Mu Bai manages to deflect them with his sword. He engages Fox sword-to-sword and eventually shreds her blade, sending the shards through her body, mortally wounding her. In her dying breaths she calls Jen a deceitful whore and tells Mu Bai that he will die just like his master. Mu Bai finds that one of the barbs has hit his neck. Jade Fox dies as Shu Lien arrives. Jen, contrite, says that she knows the antidote to the poison, but that it will take time to prepare. She leaves and Shu Lien stays with Mu Bai as he meditates to slow the effects of the poison. However, before Jen can return, Mu Bai succumbs in Shu Liens arms, professing his love for her.
Jen arrives back at the cave with the antidote but discovers she's too late. She kneels before a vengeful Shu Lien who simply tells her to meet with Lo who is waiting for her in the mountains. Jen goes and is reunited with Lo, though she is unhappy. He finds her gone one morning and discovers her looking out over the side of the mountain. She asks him if he remembers the story of the man on the mountain that he told her long ago and tells him to make a wish. He wishes to return to the desert and Jen jumps off, falling gracefully through the mist. Lo cries silently as Jen disappears, a peaceful look on her face.