Set in 18th-century China during the Manchu-led Qing dynasty, the novel follows the quest of the Red Flower Society, a secret organisation aiming to overthrow the Qing government, and their entanglements with an Islamic tribe in western China. The "book" in the title refers to a Quran that was stolen from the tribe while the "sword" refers to a sword given to the protagonist, Chen Jialuo, by his first romantic interest, Huoqingtong. Historical figures such as the Qianlong Emperor, Zhaohui, Heshen, Zheng Banqiao and Fuk'anggan also make appearances or are mentioned by name in the novel. One of the female protagonists, Princess Fragrance, is loosely based on the Qianlong Emperor's Fragrant Concubine.