When woodcutter Wang Dashan falls off a cliff, he rescues the Third White Dragon Prince, who has been imprisoned in chains by the Black Dragon Crown Prince. Risking his life, he obtains a blade capable of cutting the chains and helps the White Dragon escape. With the dragon pearl's help, he awakens a stone statue of a woman named Liu Lianxin, and the two become husband and wife. When the hunted White Dragon seeks refuge with them, the couple ventures far into the snowy mountains to gather snow lotus flowers to save him. An evil Taoist exploits a drought to manipulate the villagers into offering the White Dragon as a sacrifice. The White Dragon breaks the restrictions, punishes evil, and establishes a rule that rain will fall only when people do good deeds. He then returns to the Dragon Palace, while Wang Dashan and his wife remain in the human world to witness people turning toward goodness.