This blue-bladed lightsaber was a weapon that had once belonged to Jedi Master Sifo-Dyas. It contained a blue Adegan crystal. After the Jedi Master's death in 32 BBY, it was given to the cyborg Grievous by the Sith Lord, Confederate Head of State Count Dooku for him to use. It served as the first Jedi lightsaber for his collection.
This lightsaber was created by Sifo-Dyas during his years as a Jedi. He additionally owned another lightsaber, which was on his person at the time of his death on the desert moon of Oba Diah. Following his death, Dooku collected the saber not on his person as well as Dyas' corpse, which were preserved in a coffin-like transparent freezer unit, the body arranged as if resting with the lightsaber still clasped in his hands.
Dooku kept hold of the lightsaber during the cybernetic reconstruction and training of the mortally wounded Kaleesh warlord Qymaen jai Sheelal, eventually presenting it the cyborg as a reward. However, when Dooku did so, he referred to Sheelal as a "droid," enraging the Kaleesh.
Shortly after Dooku left, Sheelal began deteriorating into violent rage. Sitting in his chair trembling, Sheelal finally leapt into the air and attacked his own IG-100 MagnaGuards. Wielding the lightsaber against them, Sheelal executed them with brutal speed and efficiency. When he finished, Sheelal angrily stated that he wasn't a droid, and declared himself General Grievous.
Throughout the Clone Wars, Grievous would add the lightsabers of the Jedi he killed to the collection which started with the former blade of Sifo-Dyas.