From Zelda Wiki, the Zelda encyclopedia
Offical Art of the Magic Mirror.
|Game(s)||A Link to the Past|
|Use(s)||Used to return to the Light World and the beginning of dungeons.|
|Comparable Item(s)||Manbo's Mambo, Farore's Wind, Ooccoo|
The Magic Mirror is an item given to Link in A Link to the Past when he travels to Death Mountain. He acquires the mirror by helping the Lost Old Man find his way to the safe house on the mountain. Link is able to use this magical mirror to travel from the Dark World back to the Light World. Once returned to the Light World, he can go back to the Dark World by touching the sparkling "X" point that appears where he returned to the Light World. This "X" can also be located by using the map. The mirror is essential to getting to the Tower of Hera, the third dungeon in A Link to the Past. Due to the differing geographies, if Link would end up a location in the Dark or Light world where he wouldn't be able to stand, such as inside the wall of a building, the mirror will automatically send him back to the original world where he will have to reposition himself and try again.
One more function of the Magic Mirror is that it can warp Link back to the beginning of any dungeon if he uses it while inside.  This is comparable to the function on Manbo's Mambo in Link's Awakening.