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 could of 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. Ryo takes the mirror to Master Chen, he says Lan Di's organization the Chi You Men wants to acquire both the Phoenix and Dragon mirrors so a legendary Chinese monster called Chi You will resurrect itself and devour the world. Lan Di also did not know that Iwao had both the mirrors. Out of nowhere during the conversation, Chai comes and takes the mirror. However, his victory is short lived and the mirror is taken back by the combined effort of Guizhang Chen and Ryo.
Shenmue II Edit
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. 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.