While searching for Atreyu, Bastian, whose metal horse has disintegrated, enters a city designed without any logical planning. There, he encounters human people wearing objects as clothing and pushing handcarts. A monkey named Argax explains that this is the City of Old Emperors, populated by humans who either were or wanted to be rulers of Fantastica but used all their wishes and lost their memories. As a result, these people cannot find their way back to the human world and are stuck forever in Fantastica in a state of confusion. Fearful of ending up in the city, Bastian asks the monkey what he must do to avoid a similar fate. Argax tells him to find a wish that will return him to his own world. Leaving the City of Old Emperors, Bastian decides that instead of returning to Xayide or seeking out Atreyu, he just wants to find a way back home.

Longing to belong to a community, Bastian next enters a city on the coast of the Sea of Mist. The people inhabiting the city all look alike, and their homes and clothing are made of wicker. Learning that a group of sailors will be heading to sea, Bastian requests and is granted passage.