The film is set in the 1860s, during the Taiping Rebellion in the late Qing Dynasty in China. The story, based on an unresolved crime in 1870, tells of three sworn brothers (played by Jet Li, Andy Lau and Takeshi Kaneshiro) who are forced to turn against one another due to the harsh realities of war and political intrigue.
The story begins with a vicious battle, after which Qing-Yun (Jet Li), a Qing Army General, is the only survivor of his entire army. In his aimless wanderings he encounters a girl named Mi Lan (Xu Jinglei), who nurses him back to health. Once he regains his strength, Qing-Yun soon meets Wu-Yang (Takeshi Kaneshiro), and later Er-Hu (Andy Lau); leaders of a bandit army that regularly steals food to survive — his participation in a successful raid on a rebel military convoy immediately earns Qing-Yun their friendship, who take him to their village. There he finds Mi Lan again, who is revealed to be Er-Hu's wife, and they begin an illicit affair.
However, the Qing military learns of the raid and retake the stolen goods, plunging the village once again into famine. Qing-Yun thus convinces the bandits to join the Qing army to earn money and security to feed their families; Er-Hu and Wu-Yang are hesitant at first, and only agree after the three brothers swear a "Blood Oath", with which they affirm their fraternity to one another under pain of death. Qing-Yun then goes on to meet his old superiors, who are reluctant at first to reinstate him, but upon allowing him the task of conquering a major city, he proves his worth in a victorious battle against a numerically superior force — his subsequent promotion and increased support from the Qing lords spurs him to lead the brothers and his armies through a long but successful campaign against the rebels. His victories cause him to become ambitious in the process, during which he reveals his plan to quickly take Suzhou and Nanjing, including his dream of ridding the world of oppression.
Fearing Qing-Yun's growing power and influence, the Qing lords decide to deny Qing-Yun valuable reinforcements and provisions; without their support, Qing-Yun's prompt attack on Suzhou devolves into a year long siege, with both sides suffering from starvation. Desperate, Qing-Yun negotiates with a rival General for supplies, while Er-Hu sneaks into the city, hoping to negotiate with the official ruling Suzhou - he is surprised to find that the official has realized what the siege is doing to his people; hence the man allows Er-Hu to kill him and take the city, on the condition that his soldiers be spared. Moved by the official's sacrifice, Er-Hu agrees to the terms, but a returning Qing-Yun feels differently: even with the new provisions, food remains critically short, and the rebels would not agree to being conscripted. Instead, he orders the prisoners to be executed, enraging Er-Hu into considering desertion, but Qing-Yun manages to convince him to stay and help take Nanjing.
The Nanjing campaign becomes a grand success, and Qing-Yun is appointed as a provincial governor by the Empress for his services. Nonetheless, the war has caused a rift between the three brothers, most prominently with Er-Hu, who quietly defies Qing-Yun's orders by doling out soldier's pay from the imperial coffers; his offenses and popularity become known to the Qing lords, who cajole Qing-Yun into arranging his assassination. Meanwhile, Wu-Yang discovers Qing-Yun's affair with Mi Lan and catches wind of the plot against Er-Hu. Believing that Qing-Yun wants Er-Hu killed over Mi Lan, Wu-Yang murders her, but Er-Hu is already dead before Qing-Yun hears of Mi Lan's death. Wu-Yang therefore strives to fulfill the blood oath and goes to kill Qing-Yun at his inauguration ceremony. As the two brothers fight, a hidden attacker armed with a rifle shoots Qing-Yun in the back multiple times as Wu-Yang stabs him in the chest, killing him.
Now alone, Wu-Yang reminisces upon the words of the oath that was taken long ago.
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