The Jade Emperor asked the Buddha to help subdue the monkey after he created havoc in Heaven. The Buddha created the Mountain of Five Elements to imprison the monkey. Five centuries later, Xuanzang, an eminent Buddhist monk, was entrusted by Emperor Taizong of the Tang Dynasty to retrieve Buddhist sutras from the Western Continent. On his way west, Xuanzang rescued the monkey. Enlightened by Guanyin Bodhisattva, the monkey converted to Buddhism and became Xuanzang's disciple to guard him all the way to the Western Continent.

To maintain control of the unruly monkey, Guanyin instructed Xuanzang to put a golden hoop on the monkey's head and recite the hoop-tightening spell to punish any disobedience. The spell caused the monkey to writhe in agony and promise to behave. Guanyin also subdued a white dragon and transformed him into a horse to carry Xuanzang on his journey.