The Demon King is defeated by the Holy Mother and exiled from the universe. The Holy Mother retreats to refine her magical lamp. The Demon King later sends his minions to destroy the Holy Mother's predecessor, the Fairy Queen. The Fairy Queen falls in love with Yan-chang and gives up her immortality. The Demon King traps her, but her son, Chen-hsiang, uses an enchanted axe to rescue her from under a mountain.

天地初开，大魔神被玉皇大帝逐出宇宙，怀恨在心，于是重新修炼魔功，更收买天宫瑶池仙子(杨盼盼)为内应，大举进攻天庭。众仙不敌，危急之际，华山圣母(汪明荃)以天地间至高无尚的宝物宝莲灯大败群魔，力挽狂澜。宝莲灯因经历时日久远，渐趋熄灭，华山圣母遂闭关重炼宝莲灯。大魔为要歼灭华山圣母，派遣瑶池仙子返回五百年前，消灭华山圣母的前身琼花仙子(汪明荃兼饰)。琼花仙子原为剧团一小角色，与兄杨戬(卢海鹏)相依为命，遇上痴情书生刘彦昌(任达华)两人相恋，琼花更为此放弃修炼成仙的机会。大魔神亲自下凡，用魔法将琼花压于华山之下。华山圣母知道自己前身遭遇危险，派遣华山童子化为琼花之子沉香下凡解救。沉香得仙人指引，上华山寻得仙斧劈山救母。宝莲灯能否挫败大魔神，琼花仙子与刘彦昌能否再续前缘?

大魔神被聖母擊敗逐出宇宙，聖母閉關重煉寶蓮燈。大魔神再犯三界，派瑤池返五百年前消滅聖母前身瓊花仙子。瓊花與彥昌相戀，更放棄修煉成仙。大魔神將瓊花壓於華山之下，瓊花子沉香上華山尋得仙斧劈山救母。

大魔神被聖母擊敗逐出宇宙，聖母閉關重煉寶蓮燈。大魔神再犯三界，派瑤池返五百年前消滅聖母前身瓊花仙子。瓊花與彥昌相戀，更放棄修煉成仙。大魔神將瓊花壓於華山之下，瓊花子沉香上華山尋得仙斧劈山救母。