He wants to hang up his sword and finally declare his feelings for the woman he loves, warrior Yu Shu Lien (athletic Bond girl Michelle Yeoh).
His powerful sword, Green Destiny, is given to a friend in Peking - but then stolen by a masked woman.
She has been trained by Jade Fox, an old foe who poisoned Li's master.
He must now follow and, in a classic revenge plot, recover the sword, persuade his mysterious adversary to step off the path to evil... and kill Fox.
The first fight scene is simply breathtaking, as the characters run up walls and fly over rooftops in a most believable fashion.
The sequences flow like The Matrix - and were in fact put together by the same choreographer, Yuen Wo-Ping.
Taiwanese director Ang Lee's Crouching Tiger is one of the rare foreign movies to be nominated for best picture Oscar.
It is also the first foreign-language film to break the $100m barrier at the US box office.
Subtitled movies often put people off but this beautiful and magical martial arts spectacular needs no words to put you right in the picture.
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