Lan Di stole the Dragon Mirror, but Master Chen tells Ryo Hazuki there is one more mirror called the Phoenix Mirror. Ine-san tells Ryo that his father Iwao took something very important to the Antique Shop. Ryo goes to Bunkado Antiques hoping for the item to be the Phoenix Mirror, but instead it was a Sword Handguard. Ine-san tells Ryo that his father might of left them a clue. The handguard goes into a slot behind a scroll in the Hazuki Dojo. There is one more slot behind another scroll. Ryo finds a mysterious key in Iwao's room. It unlocks a box in the dojo that has a sword in it. The sword goes in the other slot, and once both items are in; the switch opens and Ryo discovers the Hazuki Residence Basement. There is a color on a wall of the basement which is slightly different. Ryo breaks that part of the wall with an ax and there is a box in there with the Phoenix Mirror inside of it.
Shigeo Yamagishi tells Ryo that the mirror has both good and bad fortune, and may have led to Iwao's unfortunate death. Keizo Oishi the owner of Bunkado Antiques says that the precious stone is only found in the Guilin region. He also says that according to a book he read, an emperor ordered a sculptor to engrave a guardian onto a stone mirror, and the phoenix is a guardian. This emperor may have been an ancestor to Shenhua.
Ryo takes the mirror to Master Chen, who says that Lan Di's organization, the Chi You Men, wants to acquire both the Phoenix and Dragon mirrors, and that Lan Di likely didn't know that Iwao had both of them. Master Chen further notes that Yuanda Zhu once told him, "When the Dragon and the Phoenix meet, the gates of heaven and earth will open, and Chi You (a world-devouring monster from Chinese folklore) will resurrect itself on earth." It is unclear if this is in reference to a literal monster or a metaphor for something else, and even Master Chen admits that he does not know the full extent of Lan Di's plans.
Later on, when Ryo arrives at Hong Kong; four thieves named Sam, Larry, Cool Z, and Wong steal his bag with the Phoenix Mirror in it. Once Ryo gets his bag back luckily the mirror was not stolen; but the money was. Later on, after Ryo chases Wuying Ren the mirror falls out of his pocket. Ryo grabs the mirror quickly so Ren doesn't steal it. Ren thinks there must be some story behind the mirror.
It's not until Ryo gets to finally meet with Yuanda Zhu in Kowloon that he learns more about the Phoenix and Dragon Mirrors. Both mirrors belonged to Sunming Zhao and Iwao brought them back to Japan. Zhu explains that when the two mirrors are brought together they form a key to treasures "hidden away in order to revive the Qing Dynasty". By using the light of a candle and smoke blown over the mirror, lights appear above the mirror to form the "The Big Dipper". This forms part of a map, but one mirror is not enough, the light of the Dragon Mirror is also needed to see the full map. Zhu also explains that Phantom River Stone can only be found in Bailu Village in Guilin, and the descendants of whoever created the mirrors should still live in the village.
In Guilin, Ryo finds a diagram for both the Dragon and Phoenix mirrors in Shenhua's house. She explains that all she knows about it is that her step-father has said it had been in his family for a long time. Shenhua mentions there is an ancient legend of ancient emperors having mirrors made from Phantom River Stone, but the rulers fought for the mirror, trying to get its hidden power, and some even lost their lives because of it.
The next day, Shenhua and Ryo enter the Stone Pit where her step-father is said to be gathering Phantom River Stone, however he isn't there. They do find a giant version of the both the Phoenix and Dragon Mirror carved into the wall of the pit.
In Niaowu, Niao Sun takes the mirror from Ryo Hazuki in exchange of Shenhua's life. A little later, in order to save Ryo from Lan Di, Ren throws a copy of the Phoenix mirror into the river to trick the deadly opponent and allow Ryo to escape.