The Skeleton Key is a key featured in two of the Nintendo 64 games of the Mario Party series, and is Luigi's favorite item. The Skeleton Key can unlock special doors throughout the various boards, usually for opening up secret paths or shortcuts. In order to use a Skeleton Key, a player must reach a door and choose to use it.
First appearing in Mario Party 2, it has a white bow on its head, indicating that it is a female. In Mario Party 3, it instead has big black eyebrows, assuming that there is a male version too (Though the male only appears in Mario Party 3 to replace the female)
The only way to discard an unwanted Skeleton Key in Mario Party 2 is by using it on a door, even if the player doesn't wish to travel through it. In Mario Party 3, it became possible for players to "use" a Skeleton Key on their turn like a normal item, which gave them the option to throw them away.
The Skeleton Key is the only item that is always for sale at an Item Shop, regardless of whether or not Toad or Koopa Kid is running it. The exception to this rule are the shops in Bowser Land where Baby Bowser forces players to buy a particular item.