The play opens upon the fifth hour of the Chinese new year's day. With the coming of the dawn the last remaining revellers make their way home from the opium dens, while the devout part of the populace are directing their steps to the temple, the House of Prayer. Chim-Fen, the proprietor of an opium den, pretends to be in love with, and desirous of marrying Hua-Quee, nurse to Hoo-Chee, the son of a rich merchant called Hoo-Tsin. His real purpose, however, is to get the nurse to steal a fan from the wealthy merchant's house, and to obtain access to the house to further his nefarious plans. Win-San-Luy, the son of Win-Shee, a learned doctor, is in love with Ah-Yoë, Hoo-Tsin's niece. At break of day, as the sun rises, they meet and confess the secret of their love. From the temple comes the echo of a hymn, from the streets are heard joyful songs.
Hoo-Tsin consults the learned doctor, Win-Shee, as to the future of his little son. Win-Shee reads in the book of stars that tragic events are shadowing him. Hence the title of "The Oracle." Chim-Fen overhears the conversation, and when the the street is deserted, save for the the little child and his nurse, he awaits his opportunity, and, finding the nurse's back turned for a moment, steals the child and hides him in his opium den. He then goes to the child's father Hoo-Tsin and asks for the beautiful Ah-Yoë in marriage should he succeed in finding and restoring the child. Hoo-Tsin accepts, but San-Luy also declares to the father that he will find the child, and asks the same reward that Chim-Fen has asked for. San-Luy suspects Chim-Fen, watches him, and after a fierce struggle succeeds in entering his opium den. He brings the little boy out of it, but Chim-Fen follows him, and with a hatchet kills him. He then opens a trap-door and pushes the child into it.
Ah-Yoë at the sight of her lover's dead body becomes mad. Win-Shee, the learned doctor, is also overpowered by sorrow at the death of his son, and determines to discover his murderer.
After an interval the scene opens on the second night. Win-Shee burns several sacred papers and begs the gods to aid him. A cry of distress from the little boy, Hoo-Chee, reaches his ears. He finds him beneath the trap-door and restores him to his father. Win-Shee now waits for Chim-Fen, and the latter, who has been drinking, approaches him. Win-Shee, with tragic calm, beckons him toward him, and makes him sit beside him on a wooden bench. Being convinced of Chim-Fen's guilt, with inspired frenzy he suddenly attacks him and strangles him. In the distance the step of an approaching policeman is heard. Win-Shee props the body upon the bench beside him, and, as the policeman passes, appears to be discoursing quietly to the dead man. This repeats a similar position between the two at the beginning of the opera, when the policeman also passes. As soon as the policeman is out of sight the dead body falls with a thud to the ground.