There are many subtle differences between the numerous versions of the game. The plot provided in this section is based on the PC game versions for Windows 95 and 98.
The protagonist, Li Xiaoyao(李逍遥), is an ordinary 19-year-old boy who lives in a small fishing village near Suzhou(苏州), China. During a quest to seek a cure for his ill aunt, he travels to a strange island out at sea, where he meets a fairy named Zhao Ling'er(赵灵儿). He is forced to marry her and remain on the island forever, but manages to escape home with the cure for his aunt. However, he loses memory of his adventure on the island and does not remember Zhao when he meets her again. This time, Zhao's home has been destroyed by some enemies and Li decides to accompany her to southwestern China to find her mother, who may still be alive.
Li and Zhao arrive in Suzhou and meet Lin Yueru(林月如), the spoiled daughter of a wealthy martial artist. Unexpectedly, Li emerges as champion in a martial arts contest and wins Lin's hand-in-marriage. Li and Lin are engaged but Zhao disappears mysteriously on their wedding night and they set of to find her. Their search brings them to Sichuan(四川), where the Mount Shu Sect(蜀山仙剑派), a powerful martial arts clan, is based. They learn that Zhao is actually a half-serpent spirit and has been imprisoned inside the Demon Prison Tower(锁妖塔) by the sect's elders. Li and Lin break into the tower and succeed in rescuing Zhao after making a perilous descent to its lowest level, but suffer grave injuries when the tower collapses on itself during their escape.
The trio are saved by a herbal medicine guru, who tells Li that Zhao is pregnant with his child, and that Lin has died from her wounds. Li is deeply saddened but he has a more important task to do, which is, to retrieve two rare items to save Zhao and his baby's lives. During his quest, he meets and befriends A'nu(阿奴), a white Miao(苗族) princess. They are currently in southwestern China, where the Miao people live. The land is plagued by a prolonged drought and the white and black Miao are at war over scarce resources. Li completes his mission and Zhao recovers, after which she calls for a rainstorm and restores peace to the land. They discover that the drought is orchestrated by an evil black Miao cleric. Li, Zhao and A'nu confront him and manage to defeat him after a battle, but Zhao sacrifices herself to destroy a monster summoned by the cleric.
Li is traumatized by the loss of his two close friends, who are also his love interests. He bids A'nu farewell and walks away alone. Just then, he sees Lin, carrying his child. Lin's reappearance at the end of the game is often disputed, but the official story released by the producers claim that Lin is indeed dead and cannot be resurrected. However, her body may be brought back to life, but she will never be the same as before because her soul is dead.