The First Hokage's granddaughter, Tsunade, inherited it several decades before the start of the series. She in turn gave it to both her younger brother, Nawaki, and her lover, Dan, in the hopes that it would help them achieve their dreams of becoming Hokage. Both died soon after receiving the necklace during the Second Shinobi World War, returning the necklace to Tsunade's possession and leading others to believe the necklace was cursed. Believing this, Tsunade kept the necklace for herself for the next few years and lost faith in those who dream of becoming Hokage.
In Part I of the series, Tsunade met Naruto Uzumaki. Not only did he dream of becoming Hokage but he also bore some resemblance to both Nawaki and Dan. Deciding to tempt fate one more time, Tsunade made a bet with Naruto: if he could master the Rasengan in a week, therefore proving himself worthy of the position of Hokage, she would give him her necklace. He agreed and was able to accomplish the task, prompting Tsunade to put faith in the title of Hokage and the necklace one more time.