In 450 A.D., the ruling Chinese dynasty is under constant threat from the Rouran tribes. The Chinese army conducts a nationwide draft. A retired soldier named Hua Hu insists on enlisting again to serve his country. Mulan (Zhao Wei), his young daughter, is quite intelligent and skilled in various martial arts. But because she is a woman, she cannot enlist. Mulan tricks her father, steals his armor and weapon, disguises herself as a boy and enters the Wei army in her father's place.
Through the harsh military training, Mulan proves to be quite courageous, quick-thinking, and unstoppable, always helping others fend off the army bullies. She gains the attention of Wentai (Chen Kun), the battalion's Sub Commander. They soon befriend and develop a mutual fondness and liking for one another.
One night, when Wentai is taking a bath in a hot spring, he accidentally runs into Mulan. After a brief skirmish, Mulan escapes without exposing her identity. However, Wentai becomes determined to uncover the woman hiding among the troops. To make things worse, the army bully loses a jade pendant and a strip-search is ordered. Terrified to reveal herself as a woman and tarnish her father's reputation, Mulan admits that she committed the theft.
In prison, she tells Wentai the truth and he promises to keep her secret until the very end. When the Rourans launch a surprise attack, Wentai releases Mulan from jail, but Mulan stays back to fight. Her life is spared and she is also promoted to be a female sub-commander.
Unhappy that the Rouran tribes have not joined forces to create a powerful army to fight against the Wei forces, the greedy Prince Mudan murders his own father to seize the throne for himself.
Mulan's troops then fight strongly against the Rourans, but many, including Mulan, are injured in a volley of arrow fire. Suddenly, a huge dust storm known as the Poison Dragon appears, and everyone on the battlefield is consumed by it. When they regain consciousness, Mulan is reunited with Wentai and she orders a retreat back into the closed canyon. Mudan wants to see how Mulan copes without any provisions and sets up a siege at the entrance of the canyon. Mulan is very sick, but is kept alive by Wentai, who gives her his own blood to drink as the provisions of water have run out.
When Mulan realizes that the Commander-in-Chief isn't bringing his troops and they have been left to die, she prepares her troops to fight to the death for their country. Wentai goes to the front line and announces he is the 7th Prince of Wei, and offers to be taken prisoner in return for Mulan and her soldiers' freedom. Mudan takes him as prisoner and delivers provisions and medical supplies to Mulan and her troops.
Mulan changes her military uniform to that of a Rouran woman's to save Wentai. Talking to the Rouran princess, she reveals her gender as a woman and tells her that she would help her fulfill her dream to stop the war and have peace. Mulan saves Wentai with the help of the princess and returns to the Wei capital, where she at last reveals herself as a woman. As Mulan asks to only return to her village to take care of her ill father, the emperor announces the engagement of the Rouran Princess and Wentai to bring peace to the two empires. Back at Mulan's hometown, Wentai visits her to ask her to runaway with him, but Mulan chooses the country of China over their purely deep, close romantic relationship. He respects her decision, and the two share a long passionate embrace before Wentai departs.
