A magical Chinese blade
The Dragon Blade was a magical blade that could absorb the souls of those stabbed by it. This process also transfered their powers into the blade. The handle had an ornate Chinese design and the blade glowed green when used.
In 2001, the Zen Master told his daughter An Ling that the Dragon Blade was the only thing capable of stopping his evil pupil Yen Lo. When An Ling went to the shop to get the blade, the shopkeeper refused to give it to her, so she stole it instead. This was witnessed by Piper Halliwell, who followed An Ling into an alley and witnessed Yen Lo stabbing and abducting the Zen Master to Limbo.
An Ling went to the manor with Piper, where she explained what was going on. When Yen Lo attacked the manor, he managed to steal the blade because Paige and Phoebe had swapped bodies. Piper then used the same potion to switch bodies with the Zen Master. Yen Lo instantly figured out something was wrong and captured Piper's soul.
When An Ling, the Zen Master and the sisters traveled to Limbo, a fight ensued between Yen Lo and Phoebe, during which Paige managed to orb the blade to her and free Piper's soul. She then orbed the blade to Phoebe, who used it to stab Yen Lo. With his soul captured, Limbo became peaceful once again and the Zen Master walked into the afterlife with the blade to be reincarnated. Presumably, the blade ceased to exist.