Guo Jing and Yang Kang are the sons of two rebels. The rebels are killed by imperial soldiers, and then, the boys are rescued by six skilled pugilists. The pugilists agree to separate the two boys, tutor them separately in martial arts, and let them meet again when they have grown up, to determine whose abilities are better. Guo becomes the student of the "Seven Freaks of Jiangnan" while Yang Kang becomes the foster son of a Jurchen prince inadvertently.
When he reaches adulthood, Guo Jing travels to a local town, where he meets and befriends a beggar named Huang Rong, who is actually the daughter of Huang Yaoshi, master of Peach Blossom Island. He also meets Yang Kang, without knowing Yang's true identity, during a contest to win the hand-in-marriage of Mu Nianci, the adopted daughter of Yang's father. Yang's father is actually still alive. Yang Kang is tempted by the wealth and fame of being a noble, and he refuses to acknowledge and betrays his father, while his mother commits suicide.
Huang Rong reveals to Guo Jing later that she is actually a woman and they go on adventure together. Guo Jing learns the "Eighteen Dragon-Subduing Palms" from the "Nine-fingered Beggar" Hong Qigong, while Huang Rong is groomed by Hong to become his successor as chief of the Beggars' Sect. Guo and Huang travel to Peach Blossom Island later to meet Huang's father. Huang Yaoshi does not approve of his daughter's marriage to Guo Jing. While exploring the island, Guo Jing meets a strange man called Zhou Botong who teaches him special martial arts techniques and forces him to read a manual, which is later revealed to be written by Huang Rong's late mother.
Ouyang Feng visits Peach Blossom Island with his nephew Ouyang Ke, and he proposes a marriage between his nephew and Huang Rong. Just then, Hong Qigong also arrives and he strongly supports Guo Jing to marry Huang Rong. Eventually, Huang Yaoshi arranges for a contest between Guo Jing and Ouyang Ke to determine who is worthy of his daughter's hand-in-marriage. The last part of the contest involves both of them having to read a manual and recite it from memory later. As Guo had already read the manual earlier, he recites it easily and wins the contest. Huang Yaoshi agrees to his daughter's marriage to Guo Jing. However, Ouyang Feng realizes that the manual is actually the fabled Nine Yin Manual and he wants it for himself.
