Prior to the events of Majora's Mask, the Happy Mask Salesman was traveling through the woods in search for Masks. However, he was ambushed and knocked out by the Skull Kid and his two friends, Tatl and Tael. While the Happy Mask Salesman was unconscious, the imp stole Majora's Mask from his bag and became possessed by its evil powers.

When Link arrives in Termina, he is also assaulted by the Skull Kid, who steals his Ocarina of Time and rides away with Epona. Link chases after the Skull Kid, who turns him into a Deku Scrub. Tatl, who was left behind by the Skull Kid and Tael, decides to follow Link. The two of them make their way to the Clock Tower, where they meet the Happy Mask Salesman. He reveals that he has been following Link, and that he knows of a way to return him to his former self. However, he first needs to reclaim his Ocarina from the Skull Kid. In exchange, the Salesman asks Link to return the "precious mask" that was stolen from him within three days, before he has to depart from Termina.

Just a few hours before the Moon falls, Link and Tatl confront the Skull Kid at the top of the Clock Tower. The hero retrieves his Ocarina and plays the "Song of Time", which transports him back to the beginning of the three day cycle. He then returns to the Happy Mask Salesman with his Ocarina, who teaches him the "Song of Healing", a melody that heals troubled spirits and turns them into Masks. After the song is played, the spirit of the Deku Butler's Son is encased in the Deku Mask and Link returns to his Hylian form. Having fulfilled his promise, the Happy Mask Salesman asks for his end of the deal. After learning that Link failed to retrieve Majora's Mask, he becomes distressed and shakes Link out of frustration. He tells Link of the great lengths that he went through to obtain the Mask, as well as its true nature. He explains that if the Mask is not taken back from the Skull Kid, something horrible will happen.He begs Link to recover the Mask for him, once again stressing the fact that he must leave in just three days, which is the day of the Carnival of Time, as well as the time remaining before the Moon crashes into Clock Town. As Link and Tatl set off to recover Majora's Mask, the Happy Mask Salesman waits patiently inside the Clock Tower for their return.

Once Link successfully defeats the evil inside Majora's Mask, the Moon vanishes, thus saving the land of Termina from destruction. The Happy Mask Salesman finally obtains his Mask, which has seemingly lost its evil power. As he is in the middle of his travels, he bids farewell and implies that Link should return to Hyrule. After commenting on the number of people who Link made happy, he walks away and disappears.

The Happy Mask Salesman seems to know a lot about Link and his previous adventures, mentioning that retrieving Majora's Mask should be of no difficulty to someone like him.Moreover, if Link wears a Mask and speaks to him with it on, he will say something about that Mask: what emotion it is filled with, its rarity, or something special about it.

In Majora's Mask 3D, the Happy Mask Salesman also gives Link the Bombers' Notebook after they first meet.