If held by a Gengar (or is present in the player's Bag)PE, allows it to Mega Evolve into Mega Gengar if its Trainer has a Key Stone. Each Trainer can only Mega Evolve one Pokémon per battle.
Unaffected by item negating effects (such as Embargo and Klutz). Item manipulating effects (such as Trick and Fling) cannot give Gengar a Gengarite or remove a Gengarite from Gengar.
Outside of battle
If held by a Gengar, allows it to Mega Evolve into Mega Gengar when it performs a Spectacular Talent during a Pokémon Contest Spectacular while its Trainer has a Key Stone. Gengar will remain a Mega Gengar until the Talent Round ends.