The movie begins with a martial arts competition, in which several fighters are competing for the right to begin a quest to challenge Zetan, who possesses a special book of enlightenment that is supposed to contain all the world's wisdom. The competition eventually comes down to two fighters, Cord (played by Jeff Cooper) and Morthond (Anthony de Longis). During the fight, Cord is disqualified from competition. Morthond is awarded a special medallion that marks him as a "seeker," a person who is on a quest to find Zetan.
The quest to find Zetan requires each seeker to undergo a series of trials, usually fights, before Zetan can be located. Cord decides to follow Morthond; knowing that Morthond will know the way to the first trial.
While the two men are resting at a fountain, a blind man (David Carradine) with a staff walks by them and into a nearby building. Soon, the sounds of fights are heard. Cord goes to see what is happening. Morthond, meanwhile, leaves, hoping to be rid of Cord. Cord goes into the building and sees that the blind man appears to have stumbled onto a gang of evil fighters; they are all attacking him. However, the blind man easily defeats all of them.
The next morning, Cord finds the blind man playing a flute that is built into his staff and asks him to be his teacher. Though the blind man initially refuses, Cord follows him anyway. They soon come upon a monkey who tries to circle the blind man to attack him from behind. The blind man, however, never allows the monkey to go behind him, and the monkey, frustrated, leaves. Cord realizes that the blind man has shown him how to fight the monkey, but when the blind man compares Cord's chattering to a monkey's, Cord is offended. The blind man soon leaves Cord behind.
Suddenly, Cord sees Morthond, wounded and blinded from the first trial. Morthond gives Cord the seeker medallion, and asks Cord to help him commit suicide. Cord does, and then goes to face the trial. The trial is in the lair of a group of monkey men, and their leader (David Carradine) is fighting another seeker. After killing the seeker, Monkeyman claims his medallion. At this point, Cord steps in and announces his intention to face the trial. The two fight and Cord eventually overpowers Monkeyman, who then tells Cord how to find his second trial.
On the way to his second trial, Cord encounters a man in an large cauldron of oil (Eli Wallach), who is attempting to dissolve the lower half of his body. The man, wishing to find enlightenment, was frustrated at the fact that he could not be completely celibate, decided to remove his lower half of the body, hoping that would end his sexual urges. He invites Cord to join him, but Cord immediately leaves. Cord then comes upon a band of gypsies, where it appears every type of pleasure is available. Cord enters a tent where the leader, Chang-Sha, immediately invites him to join them. Cord tells Chang-Sha about his quest; Chang-sha then offers to allow Cord to sleep with one of his wives, a woman named Tara. Cord mentions that he has taken a vow of celibacy, at which Chang-Sha laughs. While they are talking, however, another seeker, a black giant (Earl Maynard) challenges Chang-Sha. While it appears that the black giant is a powerful foe, Chang-Sha easily defeats and kills him. Cord asks when they fight; Chang-Sha says that they must sleep first.
Cord is mediating in his tent when he is joined by Tara. At first, he resists her advances, but eventually gives in. While they are making love, Cord asks Tara to stay with him forever. Tara tells him that she will go with him, but first they must rest. When Cord awakes, he finds that the entire band has left, and that Tara has been crucified by Chang-Sha. In a rage, Cord begins looking for Chang-Sha, but is unable to find him.
The next night, Cord has a dream in which Death (David Carradine) comes for him in the form of a man-like panther. Cord, however, laughs at Death, and refuses to be scared. Death, frustrated by Cord's bravado, leaves.
Eventually, Cord comes to an oasis where he again meets the blind man. The blind man asks him about his trial; Cord says it was a lesson. He tells him that he had tried to possess Tara, and in doing so, had killed her. Cord asks him to again be his teacher; the blind man agrees if Cord will promise not to ask him any questions about anything he sees until the blind man is ready to give him an answer. Cord accepts these terms and they travel together. When they come to a river, a ferryman allows them to use his boat even though his wife doesn't think that their payment is enough. Upon crossing the river, the blind man kicks the boat in. Cord, forgetting his promise, asks why. The blind man hides, which Cord thinks is foolish, until a band of mercenaries come into the area. Cord and the blind man run, fighting the mercenaries as needed. At one point, the blind man stops to fix a wall that the mercenaries had knocked over, which Cord thinks is foolish. (action star Chuck Norris has a brief cameo in this scene as a man working on the boat.)
After they escape the mercenaries, Cord and the blind man come to a fishing village. There, a boy, spoiled because his parents worship his good looks, comes up the blind man and demands coins. The blind man strikes the boy, breaking his nose. Angry, Cord demands an explanation. The blind man says that he kicked in the boat to keep the soldiers from using it to cross the river and kill the ferryman, he fixed the stone wall to keep the soldiers from finding a bag of coins hidden there so that they would not steal it and leave its owner without means, and he struck the boy so that his parents would no longer be bound to his good looks and would be able to raise him to be a better person. Cord wonders how a blind man could know all those things, and in a sudden revelation, exclaims that the blind man has been that way before. The blind man cuffs Cord fondly and responds, "How many times?" and again leaves Cord.
Cord walks along the beach and again finds Chang-Sha and his band. When Cord explains that there is no quarrel between them, and it was he, not Chang-Sha, that killed Tara, Chang-Sha offers to allow Cord to join his band. Cord, however, insists on finding Zetan. The two fight, and as they do so, Cord suddenly finds that he is also fighting the Monkey Man and Death. Cord, off-balance from this, starts to lose. However, he soon hears the blind-man's flute, and regains focus. The fight ends in a draw, and Chang-Sha tells Cord how to find Zetan.
Cord is taken by a boat to the island where Zetan lives. When they meet, Cord is defensive at first, still expecting to have to fight. Zetan, however, explains that because Cord has made it to the island, he is entitled to take possession of the book. He tells Cord that he can become the keeper without looking at the book, just as he had, but Cord insists on looking at the book. Opening it, he finds that book's pages are nothing but mirrors. Zetan then explains that there is no book of wisdom, and the enlightenment is found only in one's self. Cord, then realizing that Zetan is not an invincible martial artist but really a prisoner, bound by responsibility, rebuffs Zetan's offer to take his place. Cord leaves the island and again finds the blind man. The blind man, now no longer blind, sees Cord and asks him what he saw in the book. Cord tells him that he saw everything. The two embrace and then the blind man gives Cord his flute, passing on his role of teacher to Cord.