Po tells the Five the story of the jiangshi (hopping ghosts), but the team don't believe him. Shifu then informs Po there have been acclaimed sightings of the ghosts at the valley cemetery. Upon arrival, the sightings turned out to be pranksters wearing masks. When they spend the night however, Po encounters a real jiangshi.

Villain: The Undertaker of the Valley of Peace Cemetery

After being defeated and humiliated by Po, Taotie has a nervous breakdown. Po apologizes and ends up giving him a new purpose in life.

Villains: Taotie and Bian Zao