Xingyin watches Haoran head to the forest each evening. At dinner, he is absent, though his excellent wine is served. Her friend Shuxiao, a lieutenant in the Celestial Army, arrives and reports that General Wu has created a tense atmosphere, sidelining General Jianyun and keeping a close watch on Shuxiao because of her friendship with Xingyin. Master Gang plays his flute and asks to extend his stay, which Chang’e grants.

Late that night, rhythmic thudding wakes Xingyin. She investigates and finds a man striking the everlasting laurel tree with an axe whose handle is a bamboo flute. He drips blood from his wounded palm onto the tree before each blow, causing a seed to fall. When he turns, she recognizes Master Gang—his frail appearance was a disguise masking a powerful aura. They fight, but when Ping’er arrives and cries out, Master Gang seizes her as a hostage, holding his axe to her neck. To save Ping’er, Xingyin drops her bow. Master Gang shoves Ping’er at her and escapes on a cloud.

Xingyin heals the cut on Ping’er’s neck and notices a pearl on a gold chain that fell from her robes—formed from Ping’er’s tears when she left her home in the Southern Sea. Xingyin retrieves the fallen laurel seed and watches as the tree heals itself with golden sap.

The next afternoon, Liwei arrives. Xingyin shows him the laurel seed, and they test its power. When Liwei tries to burn the seed with fire, it regenerates, and it also resists Xingyin’s attempt to crush it with her magic. Liwei attempts to destroy the tree itself, but it heals completely. They realize the tree’s regenerative power accelerated Xingyin’s recovery after she sacrificed her lifeforce to save her mother.

Xingyin and Liwei confront Haoran as he prepares to flee. Under interrogation, he admits Master Gang paid him to deliver drugged wine. Master Gang claimed to be retrieving something that belonged to him and wore a jade ornament carved with a sun—the symbol of the Celestial Kingdom. Xingyin allows Haoran to leave with his flowers.

That evening, Liwei takes Xingyin to the Silver River, a celestial location from a famous legend. He gives her the hairpin he once crafted and formally pledges himself to her. Xingyin hesitates, voicing her fears about his parents’ hostility and her reluctance to be confined in the Jade Palace. She accepts his love but asks for time. Liwei agrees to wait but says he will inform his parents of his intentions. He places the hairpin in her hair, and they share a passionate embrace among the stars.

One night, Wenzhi wakes Xingyin by playing a provocative song on his qin on her balcony. Enraged, Xingyin confronts him, and they have a brief physical fight. Wenzhi asks about her impending marriage to Liwei. He expresses regret for his past treatment of Xingyin, confessing he was wrong to betray her by taking her captive and stealing the dragon pearls. Wenzhi claims she is now the most important thing to him.

Xingyin refuses forgiveness but requests information about the Celestial Court. Wenzhi warns that General Wu has a keen interest in her and has been studying the moon. She tells him about the laurel tree, and Wenzhi confirms its strange, discordant energy is the source of her accelerated healing.

When Liwei approaches, Wenzhi makes himself invisible and leaves. Liwei is angry when Xingyin admits that Wenzhi was there. He warns that Wenzhi is playing a game and cannot be trusted. Despite her apprehension about his parents, Xingyin agrees to attend the Celestial Emperor’s birthday banquet with Liwei, hoping it will help mend relations.

At the emperor’s birthday banquet at Luminous Pearl Lake, Xingyin and Liwei greet Their Celestial Majesties. The emperor appears gracious, but the empress is openly hostile. General Jianyun warns them that things are tense at court. General Wu arrives, and Xingyin recognizes the bamboo flute on his sash as the handle of the axe used by Master Gang. She rips off his glove, revealing distinctive scars on his palm, and publicly accuses him of being Master Gang.

General Jianyun reveals General Wu’s full name is Wugang and recounts his history. Wugang was a mortal who murdered his unfaithful wife and her immortal lover using a stolen immortal axe. As punishment, the Celestial Emperor sentenced him to chop down the laurel tree on the moon—an impossible task since the tree had self-healing properties. After a century of torment, Wugang discovered his blood could temporarily halt the tree’s regeneration. When he finally felled the laurel using his blood, it regenerated with silver-white leaves instead of green. The emperor granted him immortality, and Wugang rose to become a court favorite.

The empress proposes a toast, and the pavilion’s roof vanishes, revealing the moon has not risen—an ill omen on the emperor’s birthday. Guests blame Chang’e for insulting the emperor. Wugang stokes suspicion by implying that she bears a grudge. The enraged emperor commands Liwei to denounce Xingyin to prove his loyalty. Liwei publicly refuses and takes Xingyin’s hand as they leave the banquet together, defying his father.

Returning to the moon, they find that Chang’e is gone. Xingyin discovers a note luring her mother to the Mortal Realm. Liwei searches for Xingyin’s mother near Houyi’s grave. She finds Chang’e wandering, disoriented, claiming she saw Houyi. Xingyin sends her home, instructing her to say she overslept to avoid the emperor’s wrath.

At the grave, Xingyin encounters an old mortal archer who addresses her as his daughter. Though skeptical, she becomes convinced that he is her father, Houyi, who carries a silver immortal bow. He explains he has been alive all along but aged while Chang’e remained immortal. Houyi reveals his true origin: He was an immortal Dragon Lord from the Eastern Sea whom the Celestial Emperor tricked into becoming mortal by erasing his memories with a tea of oblivion. The emperor promised to restore his immortality with the elixir after he slew the sunbirds, but Chang’e drank it instead. Houyi regained his memories from the elixir’s dregs.

Houyi reveals he also received a mysterious note that day. He begins coughing up blood, admitting that he is dying. He tells Xingyin there is nothing she can do, but she vows to find a way to save him and bring him home.

The next night, Xingyin seeks the Keeper of Mortal Fates in the Mortal Realm to learn how to obtain the Elixir of Immortality. He is with his apprentice, Leiying, and warns that Liwei is in a vulnerable position at court. The Keeper refuses to share information about the elixir, but Leiying signals for Xingyin to wait.

Leiying returns with her brother, Tao. They reveal they also need an elixir and propose stealing two from the Imperial Treasury, claiming there is one for each of them. Tao claims he can get them inside but needs Xingyin’s fighting skills. Leiying reveals that if a mortal dies, their memories are lost forever—convincing Xingyin to agree to save her father’s memories of Chang’e. They plan to meet the next night, and Tao makes her promise not to tell Liwei.

Returning home, Xingyin finds Liwei waiting. She tells him her father is alive but conceals the heist plan. Liwei magically reinforces her wrist guards and warns against acting rashly, stating the emperor will never yield the elixir. She pretends to agree. They share a romantic moment as he reaffirms his commitment to her.

The next morning at breakfast, the moon’s wards are breached by Celestial soldiers led by Minister Ruibing. He reads an imperial edict removing Chang’e from her duties as the moon’s guardian and placing all moon inhabitants under house arrest to await punishment. Liwei is commanded to return to the Jade Palace immediately to face judgment. Liwei promises Xingyin he will resolve the situation before leaving with the minister. Eight soldiers, including the archer Feimao, remain to guard them.

That night, as Xingyin prepares to leave for the heist, Feimao subtly warns her that his shift ends at dawn. Wenzhi intercepts her flight to the Jade Palace, warning that the wards have been altered and she will be detected. He offers to create a diversion, and she accepts. After disguising herself with a black cloth mask, she slips into the palace.

Xingyin meets Tao near the treasury. Using an innate shapeshifting ability, he alters his features. They use a jade disc key to enter a chamber where Tao reveals the elixir is in a box guarded by six stinging jade dragonflies. When the dragonflies attack, Xingyin discovers the creatures multiply when injured. Xingyin and Tao manage to trap the swarm in a brass urn.

When soldiers enter to investigate, Xingyin releases the dragonflies as a distraction. She and Tao fight past more guards and escape on a cloud. Safely away, Tao reveals there was only one elixir, not two. He apologizes as he and the elixir vanish.

Furious at the betrayal, Xingyin returns at dawn to find Shuxiao and General Jianyun waiting. They report that Liwei is held in isolation at the Jade Palace, and the emperor refuses to see him. Meanwhile, General Wu is leading a hundred soldiers to the moon. The emperor has sentenced those on the moon to confinement in the desolate tower prison. Realizing their situation is hopeless, Xingyin decides they must flee. Shuxiao insists on staying to help and asks the general to warn her family.

Xingyin instructs her mother and Ping’er to escape first while she and Shuxiao create a diversion and set a trap for Wugang at the laurel tree. Saying a silent farewell, she arms herself with the Jade Dragon Bow.

That night, as the moon’s wards are torn apart, Xingyin sees the Pure Light Palace burning. She and Shuxiao set a magical snare around the laurel tree. Wugang confronts them alone, and they fight. However, soldiers appear with Chang’e and Ping’er as hostages, forcing Xingyin to surrender. Wugang taunts Chang’e about her past and ridicules love. When Chang’e fights back, a soldier slashes her arm. Her blood spills onto the laurel’s roots, causing the tree to release thousands of seeds.

Wugang orders everyone bound and prepares to strike the unconscious Chang’e with his axe. Ping’er throws herself over Chang’e to protect her, and Wugang’s magical bolt fatally strikes Ping’er instead. Enraged, Xingyin breaks free and attacks with Sky-fire. She triggers the snare, engulfing soldiers in fire. Wenzhi arrives to help them fight off the remaining soldiers. Wugang accuses Xingyin of consorting with the Demon Realm. They escape on a cloud. Ping’er gives Xingyin her pearl and asks to be taken home to the sea before dying.