Aqua mentions the fruit when handing out Wayfinders, similar to Kairi's, to Terra and Ventus. She explains the symbolic bond the fruit has, and how it applies to their good luck charms. Experiment 626 also shows Ventus a paopu fruit-like object that he made from space parts in Deep Space, which was inspired by seeing Terra's Wayfinder when he visited the world.
After saving the Lost Boys from a swarm of Unversed in Skull Rock, Terra comes to Destiny Islands following a bright light. Upon seeing the beach, he looks down to see a paopu fruit has washed up on shore and notices the tree it fell from. He walks up to the tree and investigates it, remembering Aqua's words about the power the fruit has before meeting Riku, whom he gives the power to one day wield a Keyblade of his own.
When Aqua arrives on Destiny Islands, also following a light, she finds the paopu tree and excitedly goes to see it. She then meets Sora and Riku while walking back along the bridge, almost deciding to bequeath the power of the Keyblade to Sora, but decides against it as she senses that Riku had already been given the power by Terra.
On Destiny Islands, Riku explains the fruit to Sora while on the bridge on Destiny Islands. Riku tosses him one and tells him a legend that says that if two people share the same paopu fruit, they will remain a part of each other's lives forever. Sora gets flustered and throws the paopu fruit in the water before proceeding to run after Riku. Later on, while racing for the right to name the raft they have built, Riku raises the stakes. He says that the winner should get to share a paopu fruit with Kairi (though if asked about it after the race, he will state he was merely joking). This intensifies the rivalry between the two, both to prove who is stronger and to gain Kairi's attention. Selphie thinks the legend is very romantic and wishes to try it sometime.
Later, in the Secret Cave, Sora draws a picture of himself giving Kairi the fruit. This same drawing touches Kairi after she returns to the Islands, causing her to cry while she draws another picture of herself giving the fruit to Sora.
The paopu fruit is the Keychain on Destiny's Embrace. Upon his return to Destiny Islands, Sora discovers that Kairi had added onto the picture that he drew a year earlier; the picture now depicts Sora and Kairi exchanging a paopu fruit.
Sora and Kairi share paopu fruits with each other before heading to the Keyblade Graveyard.