After Link rescues Princess Zelda and safely makes it to the Sanctuary, the Loyal Sage marks Sahasrahla's House on his map. When Link goes looking for Sahasrahla, he is nowhere to be found, but instead, Link finds Sahasrahla's Wife. Elsewhere in the village, Link runs across Sahasrahla's Grandson, who marks the location of Sahasrahla's Hideout near the Eastern Palace.
After hearing that Link is searching for the Master Sword, Sahasrahla tells Link that he first must acquire the three Pendants of Virtue. Sahasrahla then sends Link on a test, asking him to retrieve the Pendant of Courage from the Eastern Palace. He tells Link that if he can successfully accomplish this mission, he will tell him more of the legend and will also give Link a magical artifact.
While traveling through the Eastern Palace, Link finds Telepathic Tiles, which allow Link to communicate with Sahasrahla. The first tile that Link encounters gives Link a hint that he can use the dungeon treasure hidden in the Eastern Palace to defeat the armored foes. This advice can be used against the Eyegores, as well as the Armos Knights.
After Link completes the Eastern Palace, Sahasrahla tells Link more of the legend. He mentions that three or four generations ago, an order of knights protected the royalty of the Hylia. These Knights of Hyrule were also guardians of the Pendant of Courage. Most of these guardians were destroyed in The Great War against evil that took place when the Seven Wise Men created their seal. Among the descendants of the Knights of Hyrule, a hero must appear. Sahasrahla believes that Link is that hero.
Sahasrahla gives Link the Pegasus Boots, a treasure that had been passed down by the families of the wise men. Sahasrahla also mentions that a helpful item is hidden inside the cave on the easy side of Lake Hylia. Sahasrahla is referring to the Ice Rod, which is required much later in the quest.