The story begins around 2170 B.C. after the great flood in the Hsia dynasty. Yu, king of many kingdoms, was credited with stopping the flood, and with teaching farmers how to cultivate their fields, thus commencing a prosperous epoch.

At the same time in Heaven the Jade Emperor wished to help the farmers raise animals and cultivate their fields. He gave orders to his ten sons to become ten suns and travel across the sky one at a time, each taking one day. The ten young men disobeyed; all ten of them came out every day, and the heat from ten suns shining all at once made the earth intolerably hot. People and animals died of heat, rivers dried up, land became barren and forests scorched and burned.

The farmers prayed, giving sacrifices and burning incense to Heaven for deliverance. The Jade Emperor heard their prayers and saw the destruction caused by his sons. He sent Hou Yi, his bravest god, down to earth to solve the problem of the ten suns and end the catastrophe. Hou Yi was a good, courageous god with a beautiful wife, Chang Er. Deeply in love with each other, they were known as the Divine Couple. Chang Er didn't like the thought of going down to earth, but she was unwilling to be separated from her husband, so together they descended to earth and became mortals among the Eastern clans.

Hou Yi was a great archer and brought his magic bow from heaven with him. Knowing that Hou Yi came from heaven, the people of the clans proclaimed him to be their leader.

Seeing how much suffering and destruction were caused by the heat of the ten suns, Hou Yi climbed to the top of Tienshan mountain and began negotiating with the suns to have pity on the unfortunate people. He pleaded to the suns to take turns and make their journeys across the sky singly, one for each day, and explained the white blaze of ten suns is much too much for the land to bear. He also told them how much Heaven loves all living things.

But the ten audacious suns considered it dull and boring to go across the sky one at a time and that much more fun was to be had by coming out together, so they refused to listen. They increased their heat and caused even more suffering. This angered Hou Yi. He took out his magic bow and arrows and shot down nine of the suns; the last sun begged for his life and promised obedience at performing his task of separating night from day.

Finally the earth was at peace and people enjoyed their work and lives. However, when Hou Yi made his report to the Jade Emperor, he was furious at Hou Yi for killing his nine sons, and refused to let the Divine Couple return to Heaven.

As leader of the clans, there was much for Hou Yi to do on earth. He taught the people many ways to defend their land and themselves. He was so busy with his duties he became neglectful of his lovely and lonely wife. Chang Er was especially unhappy to be an earthly mortal with all of mortality's suffering, aging and death in particular. Also, she was angry at Hou Yi for shooting down the Jade Emperor's nine sons, and the couple became unhappy and estranged.

To avoid arguing with his wife, Hou Yi spent his time travelling about the land alone. He became familiar to its people, performing many good deeds wherever he travelled. He also killed a gigantic, 100,000-foot snake and a nine-headed monster that had caused much distress and thousands of lives. Many times he prayed to the Jade Emperor to let himself and his wife return to Heaven, but the Emperor refused his plead and so Hou Yi and Chang Er remained as mortals, suffering as ordinary human beings do.

In his travel he chanced to meet a beautiful mortal woman, Mi Fei. She was the wife of Feng Yee, the God of Water, who had a reputation as a womanizer and for ignoring his wife. Both lonelyd, Mi Fei and Hou Yi became friends and later lovers. In legend, such things never remain unpunished. When Feng Yee returned and discovered his wife's infidelity, he was furious and transformed himself into a white dragon, roaring and plunging in the water, destroying fields and killing many people. Hou Yi thought the dragon was an evil sea monster. He took up his bow and shot, blinding Feng Yee in one eye. Thereupon, the god of waters registered a complaint with the Jade Emperor. The Emperor considered all the good deeds that Hou Yi had done for the mortals, and since he was already under punishment, the Emperor merely ordered Hou Yi to go home to Chang Er and never see Mi Fei again.

Hou Yi had no choice but to return home. Chang Er was angry with him for his unfaithfulness and unhappiness came between the once "divine" couple. Hou Yi knew that he had wronged his wife and tried to soothe her, telling her that tears would make her age faster, as they were now mortals. Chang Er looked at her reflection in the water, for in those days there were no mirrors. She was terrified to see wrinkles appearing around her eyes, and demanded that Hou Yi find some way to restore her immortality.

Hou Yi was desolate and dared not stay at home, but he couldn't violate the Jade Emperorís order by going to Mi Fei. He became violent and drunk. In his drunkenness he treated the people cruelly. There were two men among the people who began to plot against him, Feng Meng and Han Cho. Both were opportunists. Han Cho told Hou Yi that the Royal Goddess resided on top of Kunlun Mountain and had a pill of immortality.

Hou Yi decided that for the saje of peace at home he would climb Kunlun Mountain and begg the Royal Goddess for the pill of immortality. The Goddess, taking pity on him, gave him her one remaining pill. She instructed Hou Yi that if one person took the pill he would ascend to Heaven, but if he cut the pill into two halves and shared it with another, they could live forever. The pill had to be taken on the 15th night of the eighth month when the moon was fullest. Hou Yi was very happy and thanked the Royal Goddess exuberantly and went home to Chang Er. They decided to divide the pill and take it at the proper time so that they could both attain immortality.

Three days before the 15th day of the eighth month, Hou Yi heard of a medicinal solution called "jade elixir" that could be found on Tienshan mountain, an elixir that could could prevent women from aging and allow them to stay eternally beautiful. Hou Yi wished to please Chang Er and resume a happy life at home, so he decided that he could make the trip in three days to obtain this wonderful medicine and to surprise his wife. He left for Tienshan immediately.

On the 15th of the eighth month, Chang Er saw no sign of Hou Yi. She waited and later grew impatient, and sought out Feng Meng the schemer and asked where her husband was. Feng Meng lied and told Chang Er that Hou Yi had gone to see Mi Fei. Chang Er believed him and became furious at her unfaithful husband. As the moon rose Chang Er went into the garden, looking up to heaven and remembering the contentment in the life of immortality and the happiness of heaven, and then she thought of the sorrows of the earth. She was confused and filled with emotion. Thinking that Hou Yi had abandoned her, she swallowed the whole pill and at once she felt her body becoming lighter, rising upwards towards the sky. At this moment Hou Yi arrived back with the jade elixir and saw Chang Er ascending faster and faster.

The gods and goddesses in heaven despised Chang Er because she had abandoned her husband. Chang Er had to change her direction and head toward the cold palace in the moon. Hou Yi watched from the earth and took out his magic bow to shoot down the moon. He aimed but he could not bear to kill his wife. Frustrated and saddened, he destroyed his magical weapons and took to drink.

Hou Yi's enemy Feng Meng watch and waited until Hou Yi was senselessly drunk, then he attacked Hou Yi then and killed him. When Chang Er arrived at the cold palace in the moon and saw how her husband had been cruelly murdered she deeply mourned what she had done. She was cut off from the happy life in heaven and committed to eternity alone in the moon, becaming the moon goddess.

Each year on the 15th day of the eighth month, when the moon is at its fullest and brightest, people look at the moon and try to see in it the image of a beautiful maiden.