When the player and their partner volunteer to persuade Rayquaza to destroy a catastrophic meteor foreseen by Xatu, Alakazam and Xatu use their combined Teleport to create the Teleport Gem, capable of taking the player and their partner to Rayquaza's domain, the Sky Tower. The gem is created on the Hill of the Ancients which is where Xatu spends near to all of his time. It is later revealed that the two received help creating the Teleport Gem from "a shy, Ghost type Pokémon", who fled afterwards.
In the original games, the Teleport Gem is kept by the player but is unable to be used due to it being damaged after the events of Sky Tower. The player must instead use Fly or carry the Fly HM to return to the Sky Tower. The Teleport Gem is then used once again in order to retrieve Latias from Pitfall Valley once the team had ascended from the bottom. What becomes of the gem after its second use remains unknown. In the remake, there is no mention of the Teleport Gem being damaged, likely explaining why Fly is no longer required for future visits.