This ancient and powerful mask was once used in an ancient tribe's hexing rituals and was later sealed away because of its evil magic, which was so great that it might cause the destruction of the entire world. The mask was later recovered by the Happy Mask Salesman, a mysterious collector and seller of masks, who was eventually robbed of it by the mischievous Skull Kid. He then sought to use the mask's powers to draw the Moon out of orbit and destroy the entire land of Termina by causing an impact between the moon and the planet.
The mask has the ability to bestow an evil and wicked power upon its wearer. It also seems to have a certain extent of autonomy: the game implies that it influenced the Skull Kid to steal it. The Salesman was worried it would do something terrible, even though he owned it. The mask is eventually able to cast off the Skull Kid and move on its own accord. With the evil power of the mask, the Skull Kid was granted various undefined abilities while wearing it. In the game, these include the ability to metamorphose the physical appearances of people, contaminate Termina's weather and vegetation, fly, curse certain areas that brought Poes and control the Moon. The only thing shown in Majora's Mask that has greater power than the mask itself is the Fierce Deity Mask, which Majora owned before giving it away. In the final battle between it and Link, the mask took on three forms, each having dark powers.
The Happy Mask Salesman, in fear that a great disaster could befall Termina, tells the story of Majora's Mask to Link, just after lifting the Deku Scrub curse placed on him by the Skull Kid. The mask is introduced as an accursed item from legend. It is said to have been used by a mysterious ancient tribe in its hexing rituals. The legend goes on to say that an evil and wicked power comes upon the one who wears the mask and that the troubles caused by it were so great that their folks sealed the mask in shadow forever, preventing a catastrophe and future misuse. The tribe eventually vanished too, and the true nature of the mask was no longer known.
Many years later, the Happy Mask Salesman, a strange collector of masks, went to 'great lengths' in a quest to find the legendary mask. When he uncovered it, he seemed to immediately regret it: he later claims that he could sense a 'dark omen brewing'. Because the Happy Mask Salesman never tries to implicate anyone else in the mask's release, it is assumed that the great lengths he went to to obtain it involved unsealing it from the shadow. Later, while traveling through the Lost Woods, the Happy Mask Salesman was knocked out and robbed of the mask by an imp known as the Skull Kid and his two fairy companions, Tatl and Tael. Although Tatl later acknowledges that the Skull Kid felt rejected because his friends had left him and nobody wanted to play with him, she claims this did not explain his attack. This indication that the Skull Kid was acting abnormally suggests the mask had some influence over the Skull Kid even while carried by the Mask Salesman. The Mask's use of its influence to escape the Happy Mask Salesman would indicate it was in some way restrained or unfulfilled under the Mask Salesman's ownership. Its success at escaping shows the lack of control the Mask Salesman had over the mask's activity after its retrieval.
The power residing within the mask took control of the Skull Kid and changed him from a mischievous child to a complete psychopath. The Skull Kid, now controlled by Majora's Mask, used the power of the mask to transform Link into a Deku Scrub after stealing both Link's mount, Epona, and the Ocarina of Time, while Link is travelling abroad. Majora, using its host to enforce its will, tore the Moon of Termina out of orbit and sent it on a collision course with Termina, with Clock Town being its main impact point. After terrorizing Link, the Skull Kid starts using his powers all over Termina for mischief, including transforming Kafei into a child, injuring Koume, threatening to steal the Moon's Tear from Shikashi's Astral Observatory, contaminating the water of the regions of Woodfall and Great Bay, creating a perpetual winter in Snowhead, fooling the Gerudo Pirates, and haunting Ikana with undead creatures by opening Stone Tower's doors. Other acts of vandalism have been attributed to the Skull Kid as well, but others are implied to have been involved in these.
However, Link stumbled upon the alternate reality during the chase with Skull Kid, and eventually manages to save the Moon from crashing into the world by calling the Four Giants, whom he had rescued through the course of the game. Its plan thwarted, Skull Kid is revealed to have been a mere puppet of Majora's Mask; Majora's Mask proceeds to enforce a will of its own, and detaches itself from its host body, fleeing to the interior of the Moon using a strand of energy. The moon, now possessed by Majora's Mask, begins to overpower the Four Giants, causing it to fall closer to Clock Town at a rapid speed. Link and Tatl pursue Majora using the same energy that Majora's Mask escaped with earlier, after hastily discussing what to do. Inside the Moon, Link finds four Lunar Children running around a big tree with a single child sitting alone at the base of the tree, all of which are wearing masks; four are wearing the Boss Remains that Link cleansed from the four Temples around Termina, while the fifth one wears Majora's Mask, seemingly harmless. Upon talking to the other Lunar Children, they ask about the weather, and proceed to ask Link for some of the various Masks he has collected throughout the game. Each time a child's tasks are clear, they will take Link to a trial. When Link speaks to the child wearing Majora's Mask, Link will be taken to the Final Boss room of the game to stand off against Majora's Mask. If Link has collected all of the game's masks and traded them to the children, the one wearing Majora's Mask will offer to play a game with Link and presents him with the Fierce Deity's Mask, the most powerful transformation mask. After the defeat of Majora's three forms, Majora's Mask, Majora's Incarnation and Majora's Wrath, the mask seemingly loses its power and sentience, burning in a colorful flame, as the moon disperses into a rainbow shooting across the sky of Termina; After Link, knocked out from the battle, reconciles with the Skull Kid, reminiscing on what had been happening for the past three days, the Happy Mask Salesman appears with Majora's Mask in his hands. After sharing his thoughts about how the evil in the mask has left, he takes it with him on his travels to places unknown, with a simple goodbye to Link, cryptically explaining to make more people happy.