The Emperor's eunuchs have gained power and influence, the East Bureau and West Bureau spy and police the nation. They visit the shipyards, but only as a cover to execute those who would try and report their taking of bribes to the Emperor. Wandering hero Zhao Huai'an fights the leader of the East Bureau, defeating him and putting his head in a box and hanging it as a warning to other corrupt officials. The Emperor's chief concubine asks the West Bureau why they waste time on power struggles when she only wants them to prevent the Emperor impregnating anyone aside from her. Three pregnant courtesans have been executed, a fourth is being hunted down. Officials stop a riverboat and are about to execute a woman but a masked hero intervenes. Zhao watches from nearby and the masked hero also claims to be Zhao. The imposter helps the courtesan flee to Dragons Gate, Zhao and his followers decide to fight the West Bureau to help delay them and aid in the escape. As a sandstorm threatens and drives most travelers away, a few groups driven by different agendas are determined to stay in the desert at the famous Dragons Gate Inn. Amidst rumors of an ancient city and with Zhao Huai'an and the leader of the West Bureau approaching, events are about to unfold with the Dragons Gate Inn as the stage for an all-out clash.
Although this film is based on the story of 1992's New Dragon Gate Inn, Tsui denied that this film would be a remake of the old classic but more of a re-imagining. Tsui also worked on the screenplay in addition to directing and producing the film, to ensure the originality of the story. Before Jet Li was signed on for the role of Zhou Huai'an, Tsui reportedly offered the role to Donnie Yen but he turned it down due to the fact he has no wish to be in sequels/remakes of previous films he has already worked on. Jet Li was signed with US$12 million contracts to star in this film. Li explained his reason for joining this film stating, Actress Zhou Xun was also quoted for her reason for joining this film and she explains, Tsui also invited Chuck Comisky, the visual-effects supervisor for James Cameron's Avatar, as the 3-D director to manage the special effects. Comisky will lead a team of 3D crew from China, Korea, Singapore, Spain, etc.