King Mahabali became the ruler of the Earth and Svarga. To celebrate his victory, he decided to conduct a grand yagya. He invited gods, sages, and princes and announced that everyone who attended would be given gifts of their choosing. The gods, who had been defeated by him, appealed to Lord Vishnu.
Vishnu came to the ceremony in the form of a young Brahmin Vamana (dwarf). Mahabali welcomed Vamana with great respect and asked him what gift he desired. Vamana requested three paces of land. Mahabali laughed and said, "Only three paces of land?"
Mahabali promised to fulfill Vamana's request. Upon this, Vamana began to grow and soon reached cosmic proportions. With his first step, he covered the entire Earth. His second step covered Svarga. Vamana then asked Mahabali where he should place his foot next for the third step. Mahabali's arrogance crumbled. For Vamana's third step, he offered his own head.