Encounter of the Spooky Kind is a 1980 movie that combines action, comedy, and horror elements. The story revolves around a man who finds himself facing spooky and supernatural encounters, including zombies, black magic, martial arts, and a test of courage. As he navigates through these challenges, he also deals with themes of possession, magic, animated corpses, sorcery, and wizards. The movie features intense kung fu scenes, an unfaithful wife, a funeral home, rotten corpses, a magic duel, and the conjuring of spirits. It delves into the consequences of adultery, as well as the consequences of a husband beating his wife. Throughout the movie, the protagonist encounters various forms of demons and demonic possession, keeping secrets and facing the obstacles that arise.

Impoverished teahouse worker (and martial-arts student) Abao is engaged to his boss' daughter, Little Chu, and fights to protect her from the lecherous advances of the wealthy but repulsive Master Shi. The two men's romantic rivalry escalates into full-scale supernatural warfare after Shi enlists the aid of a wicked sorcerer, and Abao encounters a benevolent female ghost.