This is a very recent Hong Kong film, which was nominated for several oscars (is that the right name for them?) in the Hong Kong Film Awards, including best actress for Sammi Cheng.
Emperor Qi (Anita Mui - yes a female playing a man's role! - to great effect as well!), a famous and woman chasing ruler, accidentally runs into a beautiful and charming woman Wu Yen (Sammi Cheng), who is the chief of the Yaksha Mountain stronghold. The two fall in love at first sight and soon make a solemn pledge of love. Thinking that this is a match made in heaven, out of the blue, a large red mole appears on Wu Yen's face, which makes Emperor Qi run away in horror. The mole is infact caused by a fox fairy.
The fox fairy forces Wu Yen to make love with her, or she will be ugly for the rest of her life. Although beauty is commendable, love is more valuable and thus the loyal and steadfast Wu Yen refuses the fox fairy's request. This makes the bisexual fox fairy furious, and so she disguises herself as a pretty girl. On the one hand she disguises herself as a man to arouse Wu Yen's passion, and on the other she disguises as a girl to seduce Emperor Qi.
The bisexual fox fairy actually does not know what love is, and also finds herself confused. She is wondering whether she now loves Wu Yen or Emperor Qi, so she starts to socialise and move between the two...