Trapped in the cave, Aladdin rubs the lamp, unwittingly summoning the Genie: a powerful nigh-omnipotent being who lives inside it. The Genie explains that he has the power to grant Aladdin three wishes. After they get out of the cave, Aladdin uses his first official wish to become a prince to impress Jasmine, and promises to use his third wish to free the Genie from servitude.
Aladdin enters Agrabah as "Prince Ali of Ababwa," arriving in an extravagant spectacle (including Abu, who has been transformed into an elephant by the Genie), but Jasmine is unimpressed. The two later bond when he takes her on a ride on the magic carpet to show her the world she wants to see while Genie goes out with Jasmine's handmaiden Dalia. When Jasmine deduces Aladdin's true identity, he convinces her that he is actually a prince and only dressed like a peasant to meet the citizens of Agrabah beforehand. Jafar discovers Aladdin's identity and throws him into the sea but the Genie rescues him at the cost of his second wish. They expose Jafar, who is arrested. After the Sultan offers Aladdin the position as heir, Aladdin, fearing he will lose Jasmine if the truth is revealed, says he needs the Genie with him now and refuses to free him. The Genie tells Aladdin that he is not being true to himself.
Iago helps free Jafar, and he steals the lamp from Aladdin and becomes the Genie's new master. He uses his first two wishes to become Sultan and then to become the world's most powerful sorcerer, trapping the guards and Jasmine's pet tiger Rajah. He then exposes Aladdin's truth to Jasmine and exiles him and Abu to a frozen wasteland. He threatens to kill Jasmine's father unless she agrees to marry him. At the wedding ceremony, Aladdin and Abu return, having been rescued by the magic carpet, and Jasmine steals back the lamp. Furious, Jafar transforms Iago into a roc to give chase, and overpowers them.
As all hope is lost, Aladdin stalls by taunting Jafar for being second on power to the Genie, thereby tricking him into using his last wish to become the most powerful being in the universe. Due to the grey area in that wish, the Genie is free to interpret it as he wishes and turns Jafar into a genie himself. Being chained to the lamp without a master, Jafar gets trapped inside, dragging Iago inside with him. The Genie banishes Jafar's lamp to the Cave of Wonders, and Aladdin keeps his promise, using his last wish to free the Genie and turn him human. The Sultan declares that Jasmine will be the next ruler and tells her that Aladdin is a good person, and Jasmine reunites with him. The Genie marries Dalia and leaves to explore the world with her. Aladdin and Jasmine get married and start a new life.
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