Magical realism is best demonstrated in the novel when the narrator imagines herself as the warrior woman Fa Mu Lan. She learned the legend of Fa Mu Lan through "talk-story," a Chinese tradition of narration in which the protagonists are heroic women and girls. Through talk-story, the narrator (Kingston) is able to transcend what she perceives as the demeaning and passive world that her parents have constructed for her and enter one in which she is powerful and active. Talk-story also helps to connect her to her culture and her history. Despite their occasionally contentious relationship, talk-story also helps to build the bond between Kingston and her mother, who has a talent for talk-story. Kingston gets her passion for storytelling from her mother and learns about feminine heroines through her. Thus, storytelling is a feminist act in The Woman Warrior.

The legend of Fa Mu Lan mirrors the kung fu films that Kingston's mother and her aunt, Brave Orchid, would go to see at the Confucius Church. In these films, characters "jump over houses from a standstill." The journey of Fa Mu Lan begins when she follows a bird into the mountains and ends up at the hut of an elderly couple, who ask her to remain with them so that they can instruct her on how to fight against barbarians and bandits. They give Fa Mu Lan a choice: learn to fight or return to your family and harvest sweet potatoes. The choice is between a life of simplicity and established patterns and one of challenge and digression from traditional modes of feminine conduct.

After six years under the tutelage of the elderly couple, Fa Mu Lan can run beside deer and "[leap] like a monkey over a hut." Her talent is comparable to that of beings that we recognize in nature, but Fa Mu Lan is also superhuman. Like the deer and monkeys, Fa Mu Lan is also free, running in the forest and flying over rooftops. This dynamic image strongly contrasts with our traditional understanding of Chinese women at the time, in which they were bound to the home and had bound feet.

Kingston uses magical realism in storytelling to reiterate stories in which women and girls are powerful protagonists. Despite the oppression that existed in Chinese culture, women could assert themselves through storytelling and imagine their lives as free and boundless.