Cape Mario is a form of Mario and Luigi which first appeared in Super Mario World. Its abilities are much like Raccoon Mario before it, which in fact was originally going to be in the game. It can be obtained by getting a Cape Feather. It can allow Mario to fly through levels, and attack spiked enemies by spinning it around.
If the player holds down the either the or button after jumping with Cape Mario, the player can float down slowly. Also, if Mario runs at maximum speed and then presses and holds to spin jump, Mario will go very high, as if he was flying. If the player also falls to the ground during flight, Mario will perform a shattering earthquake that defeats all enemies that was currently on the ground. Luigi can also get this form, but the powers remain the same as Mario's with a slightly different flight pattern in the GBA version, moving higher and slower than Mario's.
After the cape has attached to Mario's shoes and inflated, Mario can turn around by twirling the cape, pressing if is being used to fly, or vice versa. It is impossible for Mario to turn at all in the GBA version, however, because there is only one run button.
Baby Mario uses a similar form in Super Mario World 2: Yoshi's Island where he becomes invincible. In addition to being invincible, he can also walk up walls and ceilings. This form re-appears in Yoshi's Island DS. In both games, "Superstar Mario" as he is called, can use the Cape as a parachute to float downwards.
Cape Mario appears in some e-Reader levels of Super Mario Advance 4, being used primarily in Henshin Mario de Tsukisusume!!. It can also be used anywhere with the appropiate e-Reader card. Other than that, nothing has changed with Cape Mario since Super Mario World.
In the Super Mario Adventures comic, when Princess Peach is kidnapped and taken to the Koopaling's Castle, she escapes and finds a cape in Wendy O. Koopa's bedroom. Peach falls out the window, still holding the cape, and accidentally uses it. She flys across the moat when Mario flys right past her on a Bullet Bill which makes Peach loose control. Luigi thinks that he's looking at a bird that looks like the Princess, but the second he realises it really is her she falls right into a forest and blacks out.
In Super Smash Bros. Melee and Super Smash Bros. Brawl, Mario can use a cape to reflect projectiles or flip enemies. This cape does not enable Mario to fly, however, but, when used in the air, makes Mario float a very small distance. Also, Dr. Mario can use it the same way, through it's slightly longer than normal Mario's.
Names in other languages