The opera troupe in which Chen Po and his sister Cuihong are members is engaged by the villainous Duan Zhangyuan. Duan becomes jealous of Chen's Monkey Kung Fu, and frames him by arranging for his wife to compromise him. Chen has his hands smashed as a result, and his sister must remain as Duan's concubine. Chen now leads a miserable existence, performing in the streets with his pet monkey, only to see his meager gains grabbed by the local ruffians. One youth, however, Xiao Hou, befriends him and brings him food. One day, as Chen has no money to pay off the gang, they kill his beloved monkey. Dieu Hou offers to take the monkey's place and the new act is warmly received, until the ruffians reappear. Xiao Hou tries to fight them, but Chen restrains him. Upset by Chen's apparent cowardice, Xiao Hou takes on the gang single-handed, and is severely beaten up. His courage moves Chen to teach him his own Monkey Kung Fu techniques, and soon Xiao Hou feels ready to tackle the gang again. This time they are forced to bring him to their boss, Wu Caihe, who manages a brothel for Duan. Duan himself happens to be present, together with his wife and his concubine, Chen's sister. Cuihong realizes that Xiao Hou is her brother's disciple, and saves him when he is overpowered and tortured by Duan. Xiao Hou must later return to the brothel to retrieve his hat, a treasured gift from Chen. There he finds Cuihong, aware now that her brother was framed, and eager to help attack Duan. But their attempt fails. Xiao Hou escapes, while Cuihong dies violently soon afterwards. When Chen learns the whole story, he vows to take revenge. He perfects Xiao Hou's martial skills until, as a team, they seek out Duan. After a spectacular fight, Duan meets the death he deserves.