The Locket was a sponge-shaped item that opened up to reveal the portraits of the young Voodoo Lady and Coronado De Cava. It was given to the Voodoo Lady long ago by Coronado as a token of his love, before embarking on the quest to find La Sponja grande.
The Voodoo lady gives the locket to guybrush, telling him to give it to Coronado De Cava, so that he could help Guybrush to find the sponge. The locket also has the ability of transferring someone's mind into another's body depending on the photos attached to the locket. The process can be done by pressing the button connecting the halves of the locket.