Shan Yu is first seen using the sword to menace an Imperial scout. After climbing a tree for a lay of the land, he uses his sword to cut the top of the tree for a better view, before his falcon, Hayabusa, presents him with a doll from a village in the mountains.
During the battle in the mountains, when Mushu accidentally fired a cannon causing Li Shang's troops' position to be given away to the Huns, Shan Yu slashes Mulan with his sword, which later causes her identity to be revealed after he and his Huns are caught in the avalanche Mulan caused. Upon arriving at the Imperial City to celebrate, Captain Li Shang presents the sword to the Emperor of China. However, Hayabusa suddenly snatches the sword away and returns it to its owner, who is perched on the rooftop of the Emperor's Palace. While rescuing the Emperor, Mulan uses the sword to cut the lantern line Chien Po and the Emperor are using to escape, preventing Shan Yu from following. During Mulan's fight with Shan Yu, he uses the sword to slice through three support pillars with ease while chasing her through one of the palace's halls. Sadly, Mulan manages to disarm him with her fan and pin him to the palace roof with his own weapon, buying Mushu time to kill him with a large firework.
After Shan Yu is finally defeated, the Emperor hands the sword of Shan Yu to Mulan to show the world what she has done for China. She then presents it to her father as honor to the family.
The sword is part of the Wicked Nine, a group of nine objects used by Disney Villains as revealed in "The Mystic Isles: The Falcon's Eye". It holds the Falcon's Eye, a magical jewel hidden within its hilt. It had wound up in a marketplace in the kingdom of Wei-Ling.