After Link initially saves Princess Zelda from Hyrule Castle and they escape through the Secret Passage, Link will meet up with Loyal Sage. After finding out it was Link's doing in saving Zelda, the Loyal Sage informs Link that he must stop the evil wizard Agahnim. The only way to do so is to acquire the legendary Master Sword. The Sage encourages Link to visit the village elder, as he is one of the descendants of the Seven Wise Men. He will mark the point on your map, located within Kakariko Village. The Sage will stay within the Sanctuary, hiding Princess Zelda.Lost Woods, Agahnim's forces come and capture Princess Zelda, wounding the Loyal Sage in the process. When Link arrives back at the Sanctuary, the Sage is found lying on the ground, wounded. He informs Link that Princess Zelda has been taken to Hyrule Castle. Shortly after, the Loyal Sage disappears from the Sanctuary, presumably because he has passed on.
In the end credits of A Link to the Past, the Loyal Sage can be seen within the Sanctuary reading from a book. Since Link touched the Triforce and reversed Ganon's deeds, the Loyal Sage, along with several other characters, have been revived.