Opening in 1911, shortly before the collapse of the Imperial government, Temptress Moon follows the wealthy and powerful Pang Family, whose patriarch is hopelessly addicted to opium, which he calls the source of all inspiration.
Zhengda (Zhou Yemang), Old Master Pang's oldest son, has married a woman named Xiuyi (He Saifei), and her younger brother Zhongliang is brought to live with the Pangs, where he earns his keep as a servant.
Zhengda shares his father's dependence on opium, and Zhongliang's responsibilities include minding their pipes; Zhengda also forces Zhongliang to kiss Xiuyi in a shadowy incident that suggests an incestuous relationship.
In time, Zhongliang grows to adulthood (now played by Leslie Cheung) and flees the Pang estate; he travels to Shanghai, where he becomes a gigolo, seducing women and stealing their valuables.
After Old Master Pang dies and Zhengda's addiction to drugs renders him brain damaged, his sister Ruyi (Gong Li), who had been Zhongliang's playmate in childhood, is proclaimed the head of the household.
Knowing of his connection to the Pang Family and long-ago friendship with Ruyi, Zhongliang is ordered by his bosses in the Shanghai underworld to return to the Pang estate, where he is to seduce her, gain control of the family's fortune, and then steal it from her.
Like Farewell My Concubine, Temptress Moon proved to be controversial in its native China, due to its frank but unsensational depiction of sex and drug use.