When the Jewish adventurer David Reubeni arrived in 1525 to negotiate with the king, ostensibly on a political mission from some of the Ten Lost Tribes of Israel, Molcho wished to join him, but was rejected.

The occurrence of a deadly flood on 8 October 1530, and an earthquake in Lisbon on 26 January 1531,[7] raised Molcho's reputation among the religious and political authorities.

On this occasion, Molcho carried a flag with the Hebrew word Maccabi, the four letters מכבי that also signify an abbreviation for Exodus 15:11 "Who among the mighty is like unto God?".

While the exact content of the meeting was not recorded, letters written from the court at the time indicate Molcho proposed the establishment of a joint Jewish-Christian army[9] to fend off the emperor's foreign enemies and, possibly, to reconquer the Holy Land.

It is claimed that the emperor offered to pardon him on condition that he return to the Catholic Church, but Molcho refused, asking for a martyr's death.

Two of his biographical letters, which also recount his dreams, were first published, in bowdlerized and censored form, in Amsterdam in 1660, in a book entitled Hayat Kaneh.