Emp. Chao Kuang-jen of Sing, killed by his brother Tai-tsiaig, seeks redress from Emp. Jade in Heaven. The latter delegates Lady Chih Lung (later Queen Mother Hsiao of Liao) to shake the Sing reign, but as the empire is not yet doomed, Ta Peng, Wen Chu-sheng and Tien Chi-sheng also come to earth to help it. Trying to contradict his master Han Chung-li against Heaven's will, Lu Ting-pin assigns Hsiao Tien-chu and Tien-yu to help Liao topple Sung.

Pan Hung, whose daughter Feng is Flap. Tai-tsung's favorite concubine, runs roughshod over the people by dint of his royal kinship, while Yang Yeh's loyal family of 8 warriors win the imperial grace for worthy services rendered, much to his jealousy. Princess Tsai falls in love with Yang No. 6 and decides to – marry him. Pen Hung's son Lung engages in a duel with him to vie for her favor, but No. 6 beats him to his chagrin. Egged on by Hsiao Tien-chu and Tien-yu, Lung and his brothers convince their father to conspire with Liao to topple the Sung reign. Thus Queen Mother Hsiao, a regent for the weak Enp. Tien Ching of Liao, dispatches troops to invade Sing.

With royal permission, Pan Hung holds a tournament to decide on a Marshal to lead the Army against Liao, and then hurts the contestants by foul means, hoping to put his third son Pan Pao in command. Meanwhile, he provokes Yang Yeh to stop his sons from taking part in the duel. The curious Yang No. 7 detects Pan Pao's foul play and comes up to confront him, accidentally killing him. Hung pleads the case to Emp. Tai-tsung, who orders to have the Yangs beheaded. But the Yangs are proved innocent when the case is heard by Magistrate Pao.

With Pan Hung in command, Generals Yang badly defeats the Liao troops on the front. But trapped by Hung, the Generals are forced to return to rescue the besieged Tai-tsung. Yang No. 7 leads the Army to return, only to be barred by Hung. He kills the guards to break in. Finally, the Yangs' whole Army is trapped into a complete annihilation. As a result, Yang Yeh, stranded in a valley, is forced to commit suicide. No. 7 escapes to seek reinforcements and is killed by archers. No. 4 is captured, but wins the heart of Princess Ching Lien and marries her. No. 5 is rescued and becomes a monk.

The surviving No. 6 returns to the Capital to lay the case before the liege. Pan Hung is then captured, but aided by Lady Pan, he frames the Yangs for conspiracy. Luckily, an honest judge Kou Chun forces Pan Hung into confession and orders him to be exiled. He is subsequently killed by No. 6. No. 6 is ordered to suppress Liao's rebellion. Meanwhile, Tien-yu and Tien-chu return, to Heaven to bring Lu Tung-pin down to earth as counsellor to help Liao against Sung. They lay a Heavenly Gate array to trap No. 6. On learning of this, Lady Yang personally leads the Army to come to his rescue. Guided by Taoist Han Chung-li, she orders No. 8 to steal a golden sword from Liao's palace and No. 5's wife to seek help from, No. 5 in the Temple.

Learning that his mother is coming to the Liao border, No. 4 solicits an imperial decree from Princess Ching-lien to visit her. His wife is indignant over his marriage with a foreign princess, and Lady Yang stops him from returning to her. Not seeing the return of her husband, Ching-lien is heart-broken. Meanwhile, Queen-Mother Hsiao threatens to execute her for the loss of the medal-decree, but her sister Pi-lien begs mercy for her. The two sisters march to attack the Sung Army. Ching-lien is captured by No. 4's wife to the Sung Camp, and this puts No. 4 in an embarrassing position. Han leads Lady Yang and, others to smash the array and eventually rescues No. 6 out of it, heavily defeating the Liao Army. Queen- Mother Hsiao escapes and is surrounded. Counselor Lu brings in Tien-yu and Tien-chu-to repulse the Yangs by magic. Ching-lien trying to rescue No. 4. Han arrives in time to take Lu away……