The Skull Gem is held by Flavio during the story. It was formerly used to power Cortez's ship, the Black Skull. Flavio's ancestors stole it from Cortez, leaving the Black Skull stationary. The Skull Gem was passed down from generation to generation until Flavio got ahold of it. He is seen in the bar of Podley's Place with the Skull Gem on the table. The Skull Gem resembles a red crystal shaped like a skull.
In Chapter 5, Flavio journeys to Keelhaul Key with Mario and his precious Skull Gem. There is a wall that separates Keelhaul Key from the Pirate's Grotto. The Skull Gem is used to solve the wall's puzzle. After Mario defeats Cortez and escapes, he finds out that Four-eyes is really Lord Crump, who is attacking them. The Black Skull is suggested for use by Flavio, but it cannot run without the power of the Skull Gem. Flavio reveals the Skull Gem to Cortez. In the end, he trades it to Cortez for use of the Black Skull.