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Bishop of Myra

After visiting the Holy Land, Nicholas returned to Myra. The bishop of Myra, who had succeeded Nicholas's uncle, had recently died and the priests in the city had decided that the first priest to enter the church that morning would be made bishop. Nicholas went to the church to pray and was therefore proclaimed the new bishop. He is said to have been imprisoned and tortured during the Great Persecution under the Emperor Diocletian (ruled 284–305), but was released under the orders of the Emperor Constantine the Great (ruled 306–337). This story sounds plausible, but is not attested in the earliest sources and is therefore unlikely to be historical.

One of the earliest attested stories of Saint Nicholas is one in which he saves three innocent men from execution. According to Michael the Archimandrite, three innocent men were condemned to death by the governor Eustathius. As they were about to be executed, Nicholas appeared, pushed the executioner's sword to the ground, released them from their chains, and angrily chastised a juror who had accepted a bribe. According to Jona Lendering, this story directly parallels an earlier story in Philostratus's Life of Apollonius of Tyana, in which Apollonius prevents the execution of a man falsely condemned of banditry. Michael the Archimandrite also tells another story in which the consul Ablabius accepted a bribe to put three famous generals to death, in spite of their actual innocence. Saint Nicholas appeared to Constantine and Ablabius in dreams, informing Constantine of the truth and frightening Ablabius into releasing the generals, for fear of Hell.

Later versions of the story are more elaborate, interweaving the two stories together. According to one version, Emperor Constantine sent three of his most trusted generals, named Ursos, Nepotianos, and Herpylion, to put down a rebellion in Phrygia. However, a storm forced them to take refuge in Myra. Unbeknownst to the generals, who were in the harbor, their soldiers further inland were fighting with local merchants and engaging in looting and destruction. Nicholas confronted the generals for allowing their soldiers to misbehave and the generals brought an end to the looting. Immediately after the soldiers had returned to their ships, Nicholas heard word of the three innocent men about to be executed and the three generals aided him in stopping the execution. Eustathius attempted to flee on his horse but Nicholas stopped his horse and chastised him for his corruption. Eustathius, under the threat of being reported directly to the Emperor, repented of his corrupt ways. Afterward, the generals succeeded in ending the rebellion and were promoted by Constantine to even higher status. The generals' enemies, however, slandered them to the consul Ablabius, telling him that they had not really put down the revolt, but instead encouraged their own soldiers to join it. The generals' enemies also bribed Ablabius and he had the three generals imprisoned. Nicholas then made his dream appearances and the three generals were set free.