The scabbard enters Arthurian literature in the 13th-century French Vulgate Cycle, the great prose romance that established the canonical Arthurian narrative, where the Lady of the Lake bestows both sword and sheath upon the young King Arthur after his first blade, the sword from the stone that had proved his right to rule, breaks in combat against King Pellinore, the knight who spends his life hunting the monstrous Questing Beast. Merlin, the wizard who serves as Arthur's adviser and guide, leads the king to a wide still lake where an arm clothed in white samite, a rich silk fabric, rises from the water holding the sword. Arthur rows out in a barge and takes both the blade and its scabbard, promising the Lady a future favour in exchange. Back on the shore, Merlin asks Arthur which pleases him more, the sword or the scabbard. Arthur, still a boy in his understanding of kingship, answers that the sword pleases him better. Merlin rebukes him: the scabbard is worth ten of the sword, for while Arthur wears it he shall lose no blood, however sorely wounded. The scabbard is thus from its first appearance the greater treasure, the invisible armour that turns mortal blows into scratches and keeps the lifeblood inside the body where it belongs.

The scabbard's magic is simple and absolute. Unlike the sword, which dazzles with light and cuts through iron as if it were wood, the scabbard works in silence. It does not turn aside blows or harden the flesh; it simply prevents the wearer from bleeding, no matter how deep the wound. This makes Arthur nearly impossible to kill in battle, for a knight who cannot bleed cannot weaken, cannot faint, and cannot die from his injuries. The scabbard is described as heavy with gold and precious stones, a fitting container for a king's blade, but its true weight is the weight of borrowed time. Merlin warns Arthur repeatedly to guard it with his life, and even prophesies that it will be stolen by a woman Arthur trusts most, but the king, for all his wisdom in other matters, does not heed the warning as he should.

The theft comes from Morgan le Fay, Arthur's half-sister and the most dangerous sorceress in Britain. In the Post-Vulgate Cycle, the later French romance that darkened the legend and sharpened Morgan's malice, and in Thomas Malory's Le Morte d'Arthur, the 15th-century compilation that became the definitive English account of Arthur's reign, Morgan nurses a hatred for Arthur that begins with his father Uther Pendragon, the king who conceived Arthur through deception, and his deception of her mother Igraine, the Duchess of Cornwall whom Uther disguised himself to win through Merlin's magic. After her first attempt to kill Arthur through her lover Accolon, the knight she armed with a counterfeit Excalibur, fails when the Lady of the Lake intervenes, Morgan rides to the abbey where Arthur is staying and steals into his chamber while he sleeps. Finding Excalibur clutched in the king's hand, she cannot take the sword, but the scabbard lies beside him, unguarded and unregarded. She snatches it and flees, and when Arthur wakes and pursues her, she rides to the nearest lake and hurls the scabbard into the deepest part of the water. Malory records her words as she throws it: "Whatsoever come of me, my brother shall not have this scabbard." It sinks at once, heavy of gold and precious stones, and is lost to Arthur forever.

The consequences of that loss unfold slowly and then all at once. Arthur fights on without the scabbard for years, winning battles through courage and the strength of his knights, but the protection is gone. At the final battle of Camlann, on the field where Arthur faces the rebel forces of his own son Mordred, the traitor who had raised an army against him, the lack of the scabbard proves fatal. Arthur strikes Mordred dead with Excalibur, but Mordred deals him a mortal wound in return, a wound that bleeds and will not stop. The king who could not bleed now cannot staunch his own lifeblood. He is carried from the field and laid upon a barge, and soon after he commands Sir Bedivere, his last loyal knight, to return Excalibur to the lake. The sword is thrown back to the Lady of the Lake, but the scabbard remains at the bottom of whatever dark water Morgan found, and no hand rises to reclaim it.

The Post-Vulgate Cycle adds one further chapter to the scabbard's story that Malory omits. In that tradition, the fairy Marsique, a water spirit who serves the Lady of the Lake, recovers the scabbard from the waters and entrusts it to Sir Gawain, Arthur's greatest nephew and the champion of the Round Table, the fellowship of knights who gathered at Camelot, for use in a battle against the magician Mabon the Enchanter. This episode suggests that the scabbard's power is not extinguished by its dunking, that it waits in the depths for hands worthy enough to bear it, and that the magic of the Lady of the Lake outlasts even the malice of Morgan le Fay. But this recovery is brief, and the scabbard soon passes out of the narrative again, as if the story itself knows that Arthur's fate was sealed the moment the sheath left his side.