From the Super Mario Wiki
Chester is a gooey monster disguised as a purple Treasure Chest that appears in Super Mario RPG: Legend of the Seven Stars. Its name is a pun on the word "chest" and the name Chester. When the chest is closed, Chester looks exactly like any regular Treasure Box. Inside the chest is its body, which resembles a tan Ameboid. Unlike the other chest enemies from Super Mario RPG: Legend of the Seven Stars, Chester is not fought by hitting a Treasure Chest; rather, it's one of the various monsters spawned by Magikoopa and can be found in behind one of the six doors in Bowser's Keep.
In battle, Chester proves to be a tough opponent: indeed, it is one of the strongest enemies in Bowser's Keep, as it has both a high attack and a high defense. Moreover, it is immune to status ailments. Surprisingly, although it is met much later in the game, Chester has less HP than its lookalikes Hidon and Box Boy (encountered earlier in the game), although Chester makes up for that by resorting to the healing move Mega Recover when its HP is low. Chester can also use the spells Flame Wall and Sand Storm, which damage all the party members, or simply attack its opponents by stretching its gooey body in order to hit them. Chester can also summon a Bahamutt to aid it in battle.
One Chester is found inside Monstermama's house in Monstro Town; however, it is not an enemy. It appears in the upper room and tells Mario how many invisible chests he hasn't found in the game; collecting them all only makes him say, "Wow, you found them all."