Ne Zha, the son of Commander Li Jing of Chentangguan, and Ao Bing, the son of Ao Guang, the Dragon King of the East Sea, find themselves in an unimaginable fate after surviving a cataclysmic bolt of heavenly lightning. Their physical bodies are destroyed, but Taiyi Zhenren, determined to preserve their spirits, exhausts his Sacred Lotus to reconstruct their mortal forms. However, the sacrifice leaves Taiyi weakened, and in the aftermath, an enraged Ao Guang seeks retribution, unleashing imprisoned monsters and his fellow Dragon Kings upon Chentangguan. Ao Bing rises to defend the town, proving his loyalty to the people, but his efforts take their toll—his body disintegrates from the immense strain of battle.
Recognizing his son’s sacrifice, Ao Guang agrees to a temporary ceasefire, striking a fragile deal with Taiyi and Ne Zha. The terms are clear: for the next seven days, Ne Zha and Ao Bing will share a single body while they undergo Master Xian Wuliang’s three trials. Success in these trials would grant them a potion that could restore the Sacred Lotus and, in turn, create a new body for Ao Bing. These trials, typically reserved for members of the heavenly sect’s demon-hunting forces, are grueling tests of strength and wisdom.
To conceal his demonic nature, Ne Zha consumes a sleeping medicine that allows Ao Bing to assume full control. With Ne Zha’s dormant state, Ao Bing carries them through the first two trials—first, against a ruthless bandit clan, and second, against a master who has trained demons to compete in the trials. Their success, however, does not go unnoticed, and both are detained by the celestial forces for straying from the sect’s sanctioned methods.
Meanwhile, Ao Guang entrusts Shen Gongbao, a demon who had ascended to the heavenly sect’s court, with overseeing the trials and monitoring the volatile alliance between Ne Zha and Ao Bing. Shen is unexpectedly reunited with his estranged younger brother, who reveals the sect’s hidden crimes: years ago, the sect’s forces had laid siege to their village, plundering and slaughtering its people. Among the attackers was Ne Zha himself, who had once clashed with their father, the same master now competing in the trials. As these revelations come to light, chaos erupts. While the celestial sect prepares for the final trial, Chentangguan is mercilessly attacked by the dragons. In a fit of rage and vengeance, Ne Zha awakens from his dormant state, storming into the third trial and overcoming it with his unrelenting fire. As a reward, Wuliang bestows upon him the coveted potion and the title of xian.
With Ao Bing’s body restored, Ne Zha makes a fateful decision—he abandons his allies and joins Wuliang’s forces, dedicating himself to the ultimate punishment of the dragons. Wuliang’s forces plan to trap the Dragon Kings and their kin in the Bagua Cauldron, where they will be forged into elixir. Yet, as Ne Zha stands on the precipice of vengeance, he begins to question the emptiness of his path.
Before he can act, Ne Zha’s parents, alongside Taiyi and Ao Bing, arrive at the cauldron to reveal the shocking truth about the war’s origins. In a vision of the past, Shen Gongbao uncovers Wuliang’s dark scheme: it was he who orchestrated the destruction of Chentang Pass. In a ruthless bid for power, Wuliang manipulated the Dragon Kings into betraying their own kind, using the chaos to justify the sect’s dominance over all other significant forces. The massacre of Chentangguan was not a result of Ao Guang’s aggression, but a carefully crafted ploy to frame the dragons. When Shen realized the deception, he made a last stand against Wuliang’s commanders, ensuring Ne Zha’s parents’ survival through a petrification spell. Only now, after the truth has been revealed, have they emerged from their stony prison.
The final battle erupts as Ne Zha, Ao Bing, and their allies clash with Wuliang’s celestial forces. Though the Dragon Kings fight valiantly, they are ultimately defeated, and Wuliang casts the opposing warriors into the cauldron. As the infernal heat rises, the trapped warriors summon their chi to shield themselves from the flames. But their efforts are not enough—Ne Zha’s mother collapses in his arms, her final breath filled with love and reassurance. She tells Ne Zha that, no matter what he becomes, he will always be her son.
Enraged, Ne Zha channels the cauldron’s Samadhi fire into his own body, completing his transformation. With a mighty surge of power, he shatters the cauldron’s lid, rallying the dragons and prisoners to break free. United under a single cause, they overwhelm Wuliang’s forces, forcing them into a humiliating retreat.
With the battle over, Ao Guang leads the remaining dragons into exile beneath the sea, choosing to hide from celestial retribution. Ao Bing, however, refuses to flee—he elects to remain at Ne Zha’s side, dedicating himself to rebuilding what was lost.
In a post-credits scene, Wuliang makes his way to a secret prison, where he seeks an audience with the captive Shen Gongbao and Shen’s father—the master of the demon warriors. Meanwhile, Ne Zha’s elder xian brothers, sensing Wuliang’s absence, begin to question his true intentions. Though the battle is won, the conflict is far from over.
