The paper explores the narrative tradition focussing on Han Xiangzi, one of the Eight Immortals (Baxian). This tradition began in the Tang dynasty and evolved to include dramatic pieces, vernacular novels, and various forms of popular literature such as precious scrolls and ballads. Its main themes are Han Xiangzi's efforts to achieve immortality through internal alchemy and his subsequent deliverance of his relatives, including most prominently his uncle Han Yu, the famous Tang dynasty scholar, and his wife Lin Ying (or Luying). Mixing Daoist proselytizing and anti-Confucian polemic, the Han Xiangzi story merges religious and literary concerns in a manner that throws an interesting light on the interplay of religion and literature in late Imperial China. In addition to analyzing the key themes in the Han Xiangzi literature, the paper addresses instances of popular worship of Han Xiangzi and the degree to which his perception in this context was shaped by his literary images. Given the often close relationship between cult and narrative literature in the cases of other deities, the question needs to be asked why the fairly well-developed Han Xiangzi lore does not correspond with an equally developed religious cult. As a number of interpretive options are explored in tackling this problem, general issues of the relationship of religion, myth, and literature in late Imperial and modern China are addressed.