In AD 859, as the Tang Dynasty declines and the corrupt emperor's influence wanes, several rebel groups are established, the largest and most proficient of which is the House of Flying Daggers. Based in the Feng Tian territory, the faction battles the corrupt government by stealing from the rich to help the poor, gaining high favor from the locals. Its highly skilled members use special throwing daggers that always hit their targets. Though the leader of the House of Flying Daggers has been recently killed, the faction continues to thrive. To find out why, two captains in the local deputies' district, Leo (Andy Lau) and Jin (Takeshi Kaneshiro), are ordered by their superiors to find and kill the new leader of the House of Flying Daggers within ten days, a task that seems impossible since the group is successful in its secrecy.They follow a tip that members of the House of Flying Daggers frequent a brothel called the Peony Pavilion. Jin enters as a customer and is introduced to a new dancer named Mei (Ziyi Zhang), a blind girl who begins to perform for Jin. He feigns inebriation and lunges at Mei, ripping at her clothes. Leo enters and threatens to arrest Jin and Mei for indecency, but the Madam of the house (Dandan Song) begs Leo to spare Mei, since she is a favorite of customers, and asks him to watch her dance before he makes a decision. At Leo's request, Mei performs an elaborate dance called The Echo Game, which reaches a stunning climax when Mei reveals herself to be a member of the House of Flying Daggers and challenges Leo with his own sword. The two engage in a fierce battle, though Mei is an impressive fighter despite her lack of sight. However, Leo eventually triumphs, and arrests Mei.Mei is put through an interrogation, and is threatened with torture, but she refuses to divulge any information about the House of Flying Daggers. Leo and Jin conclude that Mei must be the blind daughter of the Flying Daggers' old leader. In order to get more information out of her, they concoct a plan: Jin infiltrates the prison and 'rescues' Mei, claiming to be a rogue faction sympathizer named 'Wind' for his views of freedom. He states he wishes to escort her back to the headquarters of the House of Flying Daggers. Though she is unsure at first, Mei agrees. They set out into the wilderness, pursued by local deputies led by Leo. When they are 'ambushed' by deputies, Jin uses his skills in archery to swiftly kill four men to save Mei, thus gaining her trust. However, as soon as the couple leave the area, the four men stand up, having staged the attack to support Jin's deceit. As Jin and Mei continue their journey, they begin to grow affectionate toward one another, though they both try to suppress their feelings.At one point, Jin sneaks away to secretly meet with Leo who admits he is becoming worried that Jin is being taken by Mei's beauty and charm. Jin assures him, unconvincingly, that this is not the case, and returns to Mei. Later, upon a field of wildflowers, two soldiers sneak up on the couple. Jin tries to fend them off by covertly explaining that he is on their side, but he quickly discovers they are not privy to Jin and Leo's plans. More soldiers arrive and Mei and Jin are forced to fight for their lives. They are spared by the flying daggers of a mysterious benefactor and are then able to successfully defeat the remaining soldiers. Jin is genuinely confused by the attack and, sensing his sadness, Mei attempts to comfort him and tells him with a kiss that she believes he is 'for real'. Concerned for his safety, she then tells him he has done enough and requests that he leave. Jin insists on staying.Later, Jin meets with Leo again and angrily asks why he and Mei were ambushed for real. Leo tells him the soldiers that attacked were commanded by the General of the military who has decreed that blood must be spilled in order to draw out the House of Flying Daggers. Jin is crushed when he realizes that his own life is considered collateral and the two men argue over their respective duties. Jin then storms off, telling Leo he quits the mission. When Jin returns to Mei, she questions where he has gone and the two argue over Jin's fidelity. The argument ends with Mei riding off on her own. Jin considers leaving, but can't bring himself to abandon Mei. He chases after her as military soldiers close in. Mei is eventually trapped within a lush bamboo forest and, even when Jin arrives and fights to defend her, they are soon outmatched. At the last moment, members of the House of Flying Daggers come to their rescue and Jin is detained.At headquarters, Jin is brought before the leader of the House, Yee, who is none other than the Madam from the Peony Pavilion; her undercover alias. Yee questions Jin on his loyalty to Mei and asks if he would consider marrying her. When Jin says yes, he is bound and treated like a prisoner. A captured Leo is brought in and it appears as though the House of Flying Daggers were aware of their plan all along. Mei enters the room and subtlety reveals that she is, in fact, not blind. Devastated by this revelation, Jin questions her and she states that she is simply one of the many girls within the faction, not the daughter of the leader as previously assumed. Yee takes Leo outside and releases him from his bindings. She explains that she knows the previous leader of the House planted him as a mole in the government, and that the current leader, Nia, appreciates his and Mei's efforts.It is revealed that Leo and Mei were lovers and this mission has given them the opportunity to see each other again for the first time in three years. When they are reunited, Mei thanks him for saving her and Jin in the fields (it was his flying daggers that slayed the soldiers), but when he tries to embrace her, Mei is reluctant to reciprocate. He is angered that she, the woman he loves, was made to seduce Jin and he further suspects that it was not all an act to Mei. He questions how she could fall in love with someone in three days when he has been loyal to her for three years. When Mei doesn't answer, the truth becomes evident. Leo vainly tries to convince Mei that there is no future for her and Jin and becomes more vicious in his advances. As Mei struggles to push him away, a dagger flies into Leo's back. Nia appears and reprimands Leo for forcing himself on Mei before instructing him to return to his duties as a spy in the government. Nia then commands Mei to kill Jin as he is no longer of any use to them.Mei takes Jin away to a field, but cannot bring herself to kill him. Instead, she sets him free and they embrace, making love passionately in the tall grass. Afterwards, she tells him he must leave, but he begs her to go with him. She says that it's impossible for them to be together - that the next time they meet, one of them will have to die. They part ways, but they both change their minds and begin riding toward one another. Before they can reach each other, a trick dagger flies out and pierces Mei in the chest. Leo approaches, distraught over her treachery and confronts Jin when he arrives. Suddenly faced with the truth about Leo, Jin engages him in a fierce and epic battle, one that transgresses the seasons; the atmosphere changes from brilliant autumn to cruel winter. As Jin is on the verge of defeat, Mei rises from the ground and tells Leo that, if he kills Jin, she will rip out the dagger from her chest and kill him with it. Jin begs her not to sacrifice herself, as the dagger is the only thing keeping her from bleeding out. Leo pretends to throw a dagger and Mei thrusts the dagger from her chest, intercepting nothing but a drop of blood cast from Leo's hand. Having missed Leo entirely, the dagger lodges itself in a tree. Leo then watches as Mei dies in Jin's arms, snow falling all around them.