The following version of this book was used to create this guide: Tan, Sue Lynn. Daughter of the Moon Goddess. Harper Collins Publishers, 2022.

In Daughter of the Moon Goddess, Tan expands upon the Chinese legend of the Moon Goddess, celebrated each year in many East Asian countries with the celebration of the Mid-Autumn Festival. The original legend tells of King Houyi and his wife Chang'e, once a mortal woman who becomes the Moon Goddess. In the original legend, Chang'e steals an immortality potion from her husband, the king Houyi, in order to stop his tyrannical actions. She drinks the immortality potion herself and flees to the moon, thus becoming the Moon Goddess. As the Moon Goddess, she is tasked with lighting lanterns to light the moon each night.

Tan continues this legend in her fantasy retelling as if the the ill-fated couple had a secret daughter, Tan's protagonist and narrator Xingyin. In this fantastical world, Xingyin is an immortal like her mother and lives in a realm of other immortal beings in an ethereal city in the sky called the Celestial Kingdom.

She integrates various aspects of ancient Chinese mythology into the novel. In original mythology, the legends describing the realm of Heaven is strikingly similar to how the Celestial Kingdom is described in the novel, with an established bureaucracy ruled by a supreme emperor. Further mirroring the ancient myths, Xingyin becomes an ally to the dragons of legend, and her friendship with the wise creatures give her power beyond even the Celestial Emperor's abilities. She fights monsters of Chinese legend such as devious fox spirits and Xiangliu, the giant snake with nine heads. Many magical objects of Chinese legend are included in the novel, such as the powerful dragons's pearls and the wish granting jewel represented in the Crimson Lion Talisman.

The novel is divided into three parts, each representing a different phase of Xingyin's romantic life. Part I follows Xingyin's escape from the moon to the Celestial Kingdom, and her path to falling in love with the crown prince, Liwei. She begins her life in the Celestial Kingdom as a servant for a high ranking family. She meets Liwei by coincidence one day and the two have an instant connection. He invites her to compete for a chance to serve as his attendant and learning companion in his home, the home of the Celestial Emperor and Empress who have imprisoned Chang'e. Due to her skills as an attendant and her musical abilities on the flute, Xingyin wins the competition and begins her time as Liwei's attendant and companion. The two spend hours every day together and fall in love, their slow burn love story making up most of this part, until it is cut short by an abrupt betrayal by Liwei at the end of this section, when he bethrothes Fengmai, a princess from a neighboring kingdom.

Part II recounts Xingyin journey as she becomes a decorated war hero, fighting and befriending many mystical creatures throughout the Celestial Realm and Earth. She develops a new romantic interest in her army captain, Wenzhi. He becomes her mentor only in a militaristic sense at first, but begins to take special interest in her, visiting her in her living quarters, and making her his confidant. Soon he confesses his love for her, and asks her to move with him to his home in the Western Sea of the Celestial Kingdom. She agrees, but a kidnapping of the prince's betrothed interrupts this plan as Xingyin must go with Liwei to rescue the princess.

Part III opens as the King awards Xingyin with a wish granting gem. She wishes for reveals her identity as Chang'e's daughter, and wishes for her mothers freedom. The Emperor is livid at Xingyin hiding her identity, and considers punishing her with imprisonment or violence for her lies. After consulting with important members of his bureaucracy, he decides he will grant her the wish, as long as she retrieves four pearls from the legendary dragons first. Xingyin embarks on this mission with both her love interests, Liwei and Wenzhi, in tow. The three are able to locate the dragons and retrieve the pearls. As soon as Xingyin is given the pearls, Wenzhi kidnaps her. She is taken to Wenzhi's real home, not in the Western Sea, but in the Demon Realm. Wenzhi reveals he has been lying about his identity, and he is the prince of the Demon Realm. He wants to use the power of the pearls to overthrow the Celestial Emperor and become emperor himself, with Xingyin as his empress. Xingyin is disgusted with his betrayal and escapes with the pearls. The Demon Realm and Celestials go to war over the pearls until Xingyin finds a way to destroy their magic. She returns to the Emperor with the destroyed pearls. He is violently angry at her for destroying the pearls’ power, and tries to kill her with a magical lightning strike. She survives, and he eventually gives in and frees her mother after many of the Celestial bureaucrats vouch for Xingyin's honor. She returns to the moon and frees her mother, and romantically reunites with Liwei as the novel closes.