The Ancient Spirit Magician Fu can be found on disc 4, once you've acquired the White Boa. Head to the lower right part of the world map, in the Eastern Tribe island. Just below of the Great Ancient Ruins area, there is an ice opening you need to ram with the White Boa. After that, use the Nautilus, submerge and proceed then resurface in front of the Temple of Enlightenment.
Suggested average level is 65+
The toughest boss so far and the fact that you have to go through the whole of Temple of Enlightenment to reach him can be a pain. Be safe, go for level 75+ since the monsters in the Temple gives you a lot of EXP and it shouldn't be too hard to level. I beat him at 90+ and he was easy. He will summon guardians from time to time which you have to take down since they shield Fu from damage. Once you're done with them, equip Fire rings on Kaim, Seth and Mack (it would be advisable to place Mack on the back row). As always, cast Powerus on them. Heal from time to time, if you have a lot of MP, be safe and cast heal on everybody (Zephyrus or Zephyra) every turn. As Mack, use Combo (on Powerus) all the time since this is the only way he can do a lot of damage. Use Covera or better, Coverus with your mages since Fu does a triple-hit attack which can be critically damaging depending on your level.