Long ago, the necklace was worn by Scheherazade as she told her husband Shahryar the 1,001 Arabian Nights. As she told her tales, her magical necklace absorbed the magic which oozed from the tales, transforming it into a gateway into the past that led anyone who held the necklace to the time these tales came to be.
After Iago's redemption and befriending of Aladdin and Jasmine, he showed them the necklace and told them its story and then used the necklace's power to take them into adventures of Sinbad for a vacation. However the necklace had lost a jewel beforehand, causing it to become uncontrollable and leave them trapped in the past. They then went through several trials and tales until finally finding a way to restore the necklace and return home. Upon returning to Agrabah they were informed that the descendant of Scheherazade, Scheherazade the Fifth, would be visiting Agrabah. Aladdin and Jasmine then decided to return the necklace to Scheherazade's family.