Limbo is a plane which souls pass on their way to reincarnation. It is considered a mystical region between life and death. Time does not move in Limbo, meaning that those who enter it can remain there without ever dying. Additionally, the magical powers of those who visit it are augmented.
Zen Masters and their disciples can enter Limbo by creating a portal through water. Limbo cannot be used as a way to cheat death, otherwise the balance is thrown off, turning Limbo in a dry and corrupted realm.
In 2001, a zen disciple named Yen Lo betrayed his Zen Master. He sought revenge against his master for chosing his daughter An Ling as his successor instead of him and attacked. When he was wounded, he escaped into Limbo, causing the realm to become corrupt.
In order to stop Yen Lo, the Zen Master sent An Ling to obtain the Dragon Blade. However, as she brought the blade to her father, Yen Lo stabbed his former master before dragging him into Limbo, and later stole the blade after wounding An Ling in combat.
The Charmed Ones later followed Yen Lo to Limbo after Piper used a spell to swap souls with the Zen Master. The sisters and An Ling battled Yen Lo and eventually Phoebe managed to stab him with the Dragon Blade, trapping his soul. The Zen Master then stepped through the portal with the blade, causing them both to reincarnate.