Chen Zhen, a Chinese engineering student in Kyoto, who braves the insults and abuse of his Japanse fellow students for his local love Mitsuko Yamada, daughter of the director, returns in 1937 to his native Shangai, under Japanse protectorate -in fact military occupation- after reading about the death of his kung-fu master Hou Ting-An in a fight against the Japanese champion Ryuichi Akutagawa.

Following on from the Royal Tramp I, after discovering that the Empress is actually Lone-er, a member of the St Dragon Sect, and that she imprisoned the real empress. Lone-er is bent on eliminating the person who disclosed her true identity, Wilson Bond. But more complications ensues when Lone-er is assigned to protect the Prince, whose servant is none other than Wilson Bond.