Yao, the Ancient One, was once the master of Dr. Stephen Strange,, and Baron Karl Mordo. Upon his mortal death, the Ancient One transcended into the spiritual plane, his soul now becoming a minor cosmic entity, occasionally coming to the aid of his former disciple, Doctor Strange.
The youth who would eventually be called the Ancient One was born over 500 years ago in the mystic city of Kamar-Taj, a village in the area now known as Tibet,China. Originally, the youth was a peaceful farmer, like his fellow villagers, but encountered an older villager named Kaluu. Kaluu shared with the youth his knowledge of magic, and they began exploring the secrets of sorcery together, even learning the secrets of immortality.
The youth wanted to use his magic to help the village, but Kaluu wanted to build a vast empire, and organized the men of Kamar-Tajinto an army by magically controlling their minds. The youth attempted to warn the village, but Kaluu used his magic to incapacitate him, paralyzing him and setting him on public display. Kaluu began his conquests, and the youth called upon mystical forces while in his paralytic state, ultimately banishing him to the dimension of Cyttorak. Kaluu's spell on him protected the youth from the full effect of the mystical backlash-- instead of being immortal, he would merely age at a very slow rate.
The youth decided to seek out an order of ancient magic users known as the Ancient Ones in order to devote his entire life to their goal of combating evil sorcerers. The youth eventually became even more skilled than his colleagues, and grew in power so great that he was the first Earth mortal to meet with Eternity, the sentient embodiment of the universe, who presented him with the Amulet of Agamotto and charged him to become the Earth dimension's first Sorcerer Supreme. The Ancient One remained in this capacity for countless years, outliving almost all other members of his order.
During these wanderings he discovered the temple of Cyttorak in Korea and fought Dormammu for the first time to a standstill. During their final fight in London he succeeded in banishing Dormammu and shielding the Earth against his evil influence. He finally settled himself in Tibet where he met Doctor Anthony Druid. Posing as the High Lama, the Ancient One tested his abilities to pass on his powers to a successor by granting powers to Druid.
The Ancient One was sought by Baron Karl Mordo who desired to be his pupil. The Ancient One realized his need for a successor, and agreed to tutor Mordo. Although he recognized Mordo's evil ambitions in his mind, he decided that he could do his best convert Mordo to the service of good, or at least keep him in check.
Sometime later, Doctor Stephen Strange sought the services of the Ancient One for his own purposes, but soon tried to save the Ancient One from a plot by Mordo. The Ancient One dismissed Mordo but explained that he had used this as a test for Strange, who agreed to stay as the Ancient One's new pupil. Strange remained with the Ancient One for many years, eventually becoming the new Sorcerer Supreme and leaving to set up his own residence in New York.
Some years after Strange had left Tibet, the Ancient One and Doctor Strange teamed up to combat the evil demon,Zom. In order to defeat Zom, the Ancient One made it appear as if Zom had killed him, and seemed to transfer his magical ability into Strange. In actuality, the Ancient One activated the potential for further magical ability in Strange which had remained latent.
Later still, the Ancient One was taken prisoner by the so-called Living Buddha and minor demons called the Shadowmen, all of which were serving the extradimensional demon Shuma-Gorath. The Ancient One was made to serve as a gateway for bringing the demon to Earth. So he prompted his disciple, Doctor Strange, to destroy that portion of his mind which constituted his ego or sense of self, thus ending his corporeal existence, allowing his spirit to become one with the Universe, i.e. one with Eternity. And so he died in the Crypts of Kaa-U, At the same time trapping Shuma-Gorath in the dead brain. The ancient mage willed his consciousness to become one with the universe.
Now a being that is almost cosmic in nature, the Ancient One is spending his time as a servant and messenger to Eternity, leaving behind his once-disciple as the Sorcerer Supreme of Earth.
The Ancient One's spirit appeared to Jericho Drumm and his spirit brother Daniel through the Eye of Agamotto, bestowing upon them the title and station of Sorcerer Supreme after Doctor Strange had fallen from grace using dark powers.
When Daniel Drummused his abilities to possess Doctor Strange's friends and use them against him, Stephen had to appeal to dark magic to defeat Drumm. As Strange used his powers to continue defending the universe although it wasn't his duty anymore and managed not to sucumb before the dark magic he used, the Ancient One appeared in the battlefield and gave Strange the Eye of Agamotto again, thus becoming the Sorcerer Supreme once more.
As Sorcerer Supreme of Earth, the Ancient One possessed a greater knowledge and mastery of the mystic arts than anyone else on Earth. He was born with a great talent for sorcery, and he has fulfilled that potential through extremely long years of study and training, living for more than 500 years.
The Ancient One has the ability to tap this universe's infinite store of ambient magical energy and manipulate this to a variety of effects. The skill derives from three major sources: personal powers of the mind/soul/body, powers gained by tapping the universe's ambient magical energy and employing it for specific effects, and, finally, powers gained through the tapping of extra-dimensional energy by invoking entities or objects of power existing in tangential mystical dimensions. (The latter means of power is usually gained by reciting incantations.) Some of these effects include:
Forming magical energy bolts with a high degree of potency and control and erecting energy shields or screens with a high degree of imperviousness to both physical and magical damage.
The art of astral projection, the mental ability to separate the astral self-the sheath of the soul, or life essence-from his physical self, and in this form traverse through space unbounded by physical laws but fully retaining human consciousness. The astral form is invisible, intangible, and incapable of being harmed except by the most rigorous of mystical means. The astral form only possesses those magical powers residing in the sorcerer's mind: thought casting, psychokinesis, etc. He has such mastery that he can remain in astral form for up to 24 hours and even more before there is corporeal deterioration of his physical form. The physical form is quite vulnerable to attack when the astral form is absent. If harm were to befall the physical form while in astral form, the astral form would be stranded in the wraith-like state. While the astral form is absent, the physical form remains in an inert death-like trance.
Thought-casting over short or vast distances in a manner virtually identical with telepathy. The entire Earth was within the reach of the Ancient One's mind, providing he knew where to contact the specific mind he is seeking. He could simultaneously communicate with more than a dozen minds at a time.
Utilizing local magical energy to teleport across the face of the Earth or into a mystical dimension (certain higher dimensions beyond height, width, depth, etc. where the physical laws can be based on magic rather than science). Oddly enough, teleportation within a dimension is more taxing than teleportation between dimensions. Such expenditure of energy leaves all sorcerers mystically debilitated for a varying length of time, making teleportation a dangerous and seldom used ability. Physical teleportation across time rather than space is the most power-draining feat of them all.
The Ancient One had a vast knowledge of sorcerous spells and incantations invoking the names and aspects of various extra-dimensional objects and beings of power. Through these incantations the Mage is able to call upon these extra-dimensional power sources for very specific effects without taxing the personal abilities.
Aside of the above mentioned manipulations he has been known to use such spells capable of opening dimensional gateways, levitating, creating life-like illusions, mesmerizing others, and casting a spell of silence, preventing subjects from speaking of certain matters or subjects.
The full extent of the powers and abilities of the Ancient One's non-corporeal form after his "death" and becoming one with Eternity are unknown. In his prime, the Ancient One was a master of the martial arts. For many years prior to his death, his advanced age (he lived to be more than 500 years old) impaired his abilities to the point were he could no longer engage in physical combat. Although the magical powers of the Ancient One are as vast as they were hundreds of years ago, his physical abilities were, in his extreme old age, greatly impaired. The Ancient One had also acquired and created many mystical artifacts, including The Eye and Amulet of Agamotto, The Crystal Orb of Agamotto, The Book of The Vishanti and The Cloak of Levitation -- all which are now owned by Doctor Strange.