Palace Key

A Palace Key is a level-exclusive item needed for progress in the Paper Mario series. Palace Keys can come in several varieties.

Paper Mario
In Paper Mario, a Palace Key appears in Crystal Palace along with a Red Key and a Blue Key.

After Mario and co make great progress in Crystal Palace, they encounter a room with two locked doors on the east side. Mario uses the hole on the "mirror" in this room to go to the area behind the mirror, and eventually encounters a small Albino Dino statue in a hallway. After Mario pushes it, the big Albino Dino statue on the south side moves along. Mario then goes back to the south side to access the area below the big Albino Dino statue, and finds a Palace Key in a chest at the end of the path. After Mario uses the key on one of the locked doors, they get both unlocked, allowing Mario to access the Albino Dino riddle room to the next.

Paper Mario: The Thousand-Year Door
In Paper Mario: The Thousand-Year Door, there are two kinds of keys under the name of Palace Key: Palace Keys and Pedestal Keys.

There are three Palace Keys of the first kind. The first one is in the area before the Riddle Tower. It is dropped by the red Dry Bone in the big Dry Bone room. After Mario catches the red Dry Bone and defeats it, it drops the key, therefore allowing Mario to make progress. The second is in the descended area to the east of Riddle Tower. In the room to the north of the descended hallways 2 and 3, there is a spinning wheel with a locked door to the left. Mario finds this key on a ledge to the lower-right of the spinning wheel, and uses it to open the door to the left and activate the wheel. Eventually Mario finds an airplane room. To the north of the room is the third key. Mario must use Yoshi to reach it speedly. This key opens the door on the right of the room after which Mario will encounter Sir Grodus.

The in-game descriptions read, "A key for a door in the Palace of Shadow." and "A key for a pedestal in the Palace of Shadow."