Yaldabaoth emerges as a cognitive entity born from humanity's collective yearning for order and control, manifesting as the Holy Grail within Mementos—a metaphysical realm reflecting subconscious human cognition. This entity achieved sentience and purpose, seeking to impose absolute dominion over humanity under the pretense of saving it from its perceived self-destructive nature.

Before the narrative events, Yaldabaoth infiltrated the Velvet Room—a space existing between consciousness and unconsciousness. He imprisoned its true overseer, Igor, and fractured the attendant Lavenza into twin wardens, Caroline and Justine. Disguising himself as Igor, Yaldabaoth then manipulated the protagonist, Ren Amamiya (Joker), posing as a mentor overseeing his "rehabilitation".

Yaldabaoth orchestrated a grand experiment to validate his rule, pitting two forces against each other: Goro Akechi, who sowed chaos via mental shutdowns to elevate politician Masayoshi Shido, and the Phantom Thieves led by Joker, who aimed to reform society by changing hearts. Regardless of the victor, Yaldabaoth intended to usurp control, rigging public cognition to ensure humanity would either face ruin under Shido or blindly submit to the Phantom Thieves, thus justifying his intervention.

In "Stars and Ours," following Shido's defeat, intensifying public despair and refusal to accept reality fueled Yaldabaoth's power. He revealed his true form as the Holy Grail at Mementos' core, merging the cognitive and real worlds into the Qliphoth World. This fusion erased the Phantom Thieves from public cognition, rendering them nonexistent in the new reality.

Trapped within the compromised Velvet Room, Yaldabaoth declared the rehabilitation a failure and ordered Joker's execution. Caroline and Justine, rebelling upon regaining fragmented memories, merged back into Lavenza and exposed his deceit. Yaldabaoth then offered Joker a false paradise where the Phantom Thieves were revered but humanity remained passive. Should Joker reject this, Yaldabaoth proceeded with his conquest.

Within the Qliphoth World, Yaldabaoth manifested as a colossal mechanical angel with four arms, each wielding a symbolic weapon: the Gun of Execution (reflecting projectiles and wind), Bell of Declaration (reflecting fire and psychic attacks), Sword of Conviction (reflecting physical and electric strikes), and Book of Commandments (reflecting ice and nuclear energy). These weapons harnessed the Seven Deadly Sins, inflicting status ailments like lust or wrath that resisted conventional healing. His immortality depended on cognitive veins channeling humanity's desires, requiring their severance to weaken him.

During the final confrontation, Yaldabaoth employed almighty attacks like "Arrow of Light" and "Rays of Control," alongside summoning and reviving his arms. Nearing defeat, he charged "Divine Apex," a two-turn attack capable of annihilating the Phantom Thieves. Public doubt initially rendered their assaults futile until widespread support manifested, empowering Joker to summon Satanael. This persona delivered the "Sinful Shell," a bullet embodying humanity's reclaimed will, which destroyed Yaldabaoth and restored reality.

In an alternate outcome, accepting Yaldabaoth's deal restores the world but perpetuates human passivity, with the Phantom Thieves becoming enforcers of his control.