Two dragons appeared in the Hsai palace, claiming to be princes of Pao, and the Emperor asked the tortoise shell oracle what to do. The oracle advised collecting some of the foam from their mouths, and this they did after a piece of cloth and written petition were presented to them. The foam was sealed in a chest and the chest passed from the Hsai (c. 2205 to 1557 BC) to the Shang to the Chou dynasty (c. 110 to 221BC). In the time of the 10th king, Emperor Hsuan a case of dragon foam was opened and the foam moved through the castle. The Emperor called upon his wives to stand before it naked in hopes of distracting it enough to recapture the foam. But the foam changed and there issued forth a dragon in the form of a black lizard (others say tortoise). It went to the women's quarters and touched a young virgin.

Eight years later at the age of 15, this same girl gave birth to a daughter she bore in secret and abandoned in a wood. It chanced that a poor man and his wife, who were childless, hearing the cries of the babe, took her to their house, where they cared for her tenderly.

But the magicians came to know of the dragon's daughter, whom it had been prophesied would destroy the dynasty. Search was made for the child, and the foster-parents fled with her to the land of Pao. They presented her to the king of the land, and she grew up to be a beautiful maid who was called Pao Sze. The king loved her dearly, and when she gave birth to a son, he made her his queen, degrading Queen Chen and her son, the crown prince. Poh Fuh, the son of the dragon woman, then became crown prince instead.

Now Pao Sze, although very beautiful, was always sad of countenance. She never smiled. The king did everything in his power to make her smile and laugh. But his efforts were in vain.

"Fain would I hear you laugh," said he.

But she only sighed and said: "Ask me not to laugh."

One day the king in his endeavours to break the spell of sadness that bound his beautiful queen, arranged that his lords should enter the palace and declare that an enemy army was at hand, and that the life of the king was in peril.

This they did. The king was at the time making merry when his lords entered suddenly and said: "Your Majesty, the enemy have come, while you sit making merry, and they are resolved to slay you."

The king's sudden change in countenance made the dragon woman laugh. His Majesty was well pleased.

Then, as it chanced, the enemy came indeed. But when the alarm was raised, the lords thought it was a false one. The army took possession of the city, entered the palace, and slew the king, Pao Sze was taken prisoner, because of her fatal beauty; but she brought no joy to her captor and transformed herself into a dragon, departing suddenly and causing a thunder-storm to rage.

In another version:

The Emperor had again consulted the oracle, who told him that a young couple would be a danger to his dynasty. He sent soldiers after them, but they found out and ran away. As they ran down road, they found the dragon's baby.