Magic Shrink Potion

Shrinking Potion is a yellow concoction that is capable of shrinking almost anything it touches down to a miniscule size. In order to work, its target must be doused in Shrinking Potion, as a few mere drops aren't enough to have any effect. It is unknown if the effects of Shrinking Potion are permanent, although they can be countered with something such as Growing Potion. Waldo the Wizard is apparently the inventor of Shrinking Potion, and is capable of conjuring up a flask with little effort.

History
Shrinking Potion made its first and only appearance in The Super Mario Bros. Super Show! episode "Princess, I Shrunk the Mario Brothers". When Mario, Luigi, Princess Toadstool and Toad had been sentenced to the dungeon of Waldo's castle by Mouser and two Koopa Troopas, Waldo revealed himself and doused the villains with Shrinking Potion. Once they shrunk, Waldo placed them in a fishbowl, and announced that he would use his Shrinking Potion to vanquish King Koopa once and for all.

Hoping to shrink King Koopa himself, Toad took the Shrinking Potion from Waldo and ran out of the dungeon with it. While attmepting to splash King Koopa with the Shrinking Potion, Toad accidentally hit Mario and Luigi with it, shrinking them instead. Although Mario and Luigi got into several misadventures while they were small, they were eventually restored to their normal sizes when King Koopa mistakenly sprayed them with Waldo's Growing Potion.

Trivia

 * Although never referred to as such, Princess Peach can sometimes create a type of shrinking potion in Paper Mario: The Thousand-Year Door if she fails to properly produce an invisibility potion in the X-Naut Fortress laboratory. The effect of this potion is only temporary, and serves no real purpose.