Ning Tsai-Shen, a humble tax collector, arrives in a small town to carry out his work. No one is willing to give him shelter for the night, so he ends up in the haunted Lan Ro temple. There, he meets Taoist Swordsman Yen Che-Hsia, and the beautiful Nieh Hsiao-Tsing, with whom he falls in love.
A magical needle is used to stab and restrain ghosts, though a man gets accidentally stabbed with it (it's played for humor and shows no blood or gore).