After their nobleman father is unfairly accused of being a traitor and killed, Yoon Seo-hwa (Lee Yeon-hee), her younger brother Jung-yoon (Lee David) and their maid Dam (Kim Bo-mi) are sent to a gisaeng house. Seo-hwa’s first “patron” will be Jo Gwan-woong (Lee Sung-jae), the man who betrayed and killed her father. Before Jo Gwan-woong arrives, Dam swaps clothes with Seo-hwa so that she can run away, chased by Gwan-woong’s men. Gu Wol-ryung (Choi Jin-hyuk), a mystical forest protector and gumiho, finds Seo-hwa unconscious and, as he had fallen in love with her, protects her. When Seo-hwa wakes up, she too falls in love with him and marries him after he tells her that both Dam and Jung-yoon were able to run away and are safe. In actuality, Jung-yoon has been hanged, whereas Dam has committed suicide. Wol-ryung, unable to tell her the truth, lied to her and did not tell her that he is a gumiho.
Wol-ryung decides to become human in order to be with Seo-hwa. To do so, he must live 100 days without showing his true form to a human, without taking a life, and must help anyone that needs aid. But if he fails, he’ll lose any chance of ever becoming human, and will become a demon for the next thousand years. Wol-ryung successfully lives most of these days following these rules, but one day, Gwan-woong’s men find Seo-hwa alone in the forest. Wol-ryung rushes to help her and reveals his true form, massacring the soldiers. Seo-hwa, horrified, leaves him, and he is later killed by the righteous soldier Dam Pyeong-joon (Jo Sung-ha), who had been told that the gumiho was murdering innocents. Seo-hwa soon discovers that she is pregnant with Wol-ryung’s child and gives birth to a son. Realizing that the baby isn’t a monster and regretting her betrayal to Wol-ryung, Seo-hwa entrusts the baby in the care of a monk, So-jung (Kim Hee-won). She then confronts Gwan-woong, but is killed.
The infant is adopted by nobleman Park Mu-sol (Um Hyo-sup) and grows up as Choi Kang-chi (Lee Seung-gi), ostensibly the son of Lord Park’s servant Choi (Kim Dong-kyun), but raised as part of the Park family. Though Mu-sol’s wife Lady Yoon (Kim Hee-jung) never warmed up to him, Lord Park loves Kang-chi like his own son, and he is close to the siblings Tae-seo (Yoo Yeon-seok) and Chung-jo (Lee Yu-bi), whom he loves even though she is betrothed to another. Kang-chi is notorious in the village as a troublemaker, but he is good-hearted and loyal, and beloved by the servants at the Hundred Year Inn, which the Park family runs. However, Jo Gwan-woong returns to the village. He believes the wealthy Lord Park has hidden treasure inside the inn and, in his scheme to take over it, Lord Park is killed defending Kang-chi. Gwan-woong throws Tae-seo and his mother in jail, and Chung-jo is sold as a gisaeng and convinced to use her beauty and wiles to someday gain power and revenge. After Kang-chi promises Lady Yoon that he will take care of the Park siblings, she makes a futile attempt to stab Gwan-woong and is killed. Meanwhile, Gwan-woong becomes intrigued by Kang-chi and his seemingly super-human strength.
In the meantime, Dam Yeo-wool (Bae Suzy) and Gon (Sung Joon) had been dispatched to the village by her father, now martial arts master Dam Pyeong-joon, to investigate a series of murders they suspect Gwan-woong is responsible for. Yeo-wool witnesses the events that befall the Park family, and instinctively helps Kang-chi when he is hunted by Gwan-woong’s soldiers. During a fight, a soldier slices off Kang-chi’s beaded bracelet, which was used to contain his powers. Kang-chi transforms into a half-human-half-beast and easily defeats his enemies. So-jung later tells Kang-chi the truth about his origins, including the mystical and elusive Gu Family Book, which holds the secret to becoming fully human.
Kang-chi is taken under the wing of Yi Sun-sin (Yoo Dong-geun), a naval commander. Yi Sun-sin, Master Dam, and the late Lord Park were part of a secret group protecting the Joseon nation against foreign invasion. Yi places Kang-chi in the martial arts school run by Master Dam, and there he is trained physically and mentally and learns to control his transformations. After discovering that under the man clothes there’s a girl, Kang-chi gradually falls in love with Yeo-wool, and vice versa. But several obstacles remain in their way: the continuing villainy of Gwan-woong; the knowledge that it was Yeo-wool’s father who killed Kang-chi’s father; the reappearance of Wol-ryung who has turned into a soul-sucking demon with no memories who can only be killed by his son; and Sojung’s warning that Yeo-wool is fated to die if she stays by the side of the man she meets beneath the blossoming peach tree under a crescent moon, which is none other than Kang-chi himself.