Wong Fei-Hung (JACKIE CHAN) is a young martial arts master who's proficient in the style of drunken fighting where one confuses their opponent by appearing to be drunk, thus luring them into a false sense of security. His father, Wong Kei-Ying (TI LUNG), a respected and dignified herbalist, however, thinks the form disgraces the family - especially when Fei-Hung actually become drunk to increase his skills -- and forbids him from using it.
His stepmother (ANITA MUI), a playfully conniving woman and mahjong addict, however, encourages Fei-Hung to be himself and use that fighting style when necessary. While on an herbal shopping trip with his father, he gets that chance when he runs into Fu Min-Chi (LAU KA LEUNG), an older man who's taken a small package that's identical to the one containing ginseng that Fei-Hung stashed among an ambassador's belongings to avoid paying taxes on it.
It turns out that Fu Min-Chi was hoping to retrieve a stolen Chinese artifact, the Jade Seal of the Emperor that the ambassador and his associates were planning on smuggling out of China with many other similar artifacts. With Fei-Hung unknowingly possessing that artifact, he draws the hostile attention of many of the gangsters (including KEN LO), who are also tightening the reins on a local steel mill.
As Fei-Hung eventually learns of his possession and sets out to assist Fu Min-Chi, he has various violent encounters with the many gangsters, and uses his drunken fighting style against them, despite knowing that his father won't approve.