Fugui's wife Jiazhen (Gong Li) abandons him, and he finds himself working as a peddler, until the man who now owns his home gives him a pair of shadow puppets. Fugui learns the art of puppetry and travels as a performer; while on the road, he is arrested by Nationalist forces, until he is liberated by advancing Red Army factions, and he comes him home to his wife and children as they adapt to the nation's new leadership.
While once a lazy spendthrift, Fugui vows to change his ways, and he struggles to become a better worker and citizen. But Fugui and his family soon realize that there is adversity waiting for them around every corner, and the onset of the Cultural Revolution makes it clear that China's new regime can be as corrupt and callous as the old order.
While a Grand Prize winner at the 1994 Cannes Film Festival and recipient of the Best Foreign Language Film award at the 1995 BAFTA Awards, Huozhe did not fare well in its homeland. Chinese censors objected to the film's commentary about political abuses in China's past, as well as Zhang Yimou's attempts to present the film at several international festivals. As punishment, he was forced to write a formal apology and was not allowed to make another film for two years.

