Phoenix Stone

The Phoenix Stone is a pinkish-red, round-cut gemstone with several veins of colors similar to that of an opal. It is also a mystical relic sought out by Lillian Salvatore and of unknown significance to the Salvatore Family. However, in Something to Die For, it was revealed that the Phoenix Stone was actually created to be a supernatural prison, and that it was full of the souls of numerous, very-old vampires.

As such, stone can also be used to magically reunite a vampire soul trapped inside of it with the soul's body. However, if it is not reunited with the proper body (that is, their original body), the revived vampire spirit can experience amnesia, confusion, and overwhelming, insatiable hunger for human blood while inside their new host. This mistake is known to have happened at least twice; in the first case, the vampire soul resurrected in the body of one of the Heretics, Oscar, experienced disorienting confusion and an unquenchable hunger for human blood that caused the vampire to feed on and kill over a dozen people in a violent frenzy. In the case of the vampire spirit revived in the human/former witch Jo Laughlin's body, the spirit was apparently free of the intense bloodlust that the one in Oscar's body felt, likely due to the fact that they were not in a body that needed blood to survive, though the spirit did seem to suffer from memory loss as well.

As of now, the only known successful case of a witch reuniting a vampire soul trapped in the Phoenix Stone with the vampire's original body is Julian, whose deceased body had been preserved with magic for one hundred years until the Heretics Beau, Mary Louise, and Nora Hildegard were able to use the stone to cast the correct spell to resuscitate him. Upon his resurrection, he recognized his lover, Lily Salvatore, as well as the rest of the Heretics, with seemingly no negative consequences.

The Phoenix Stone is currently in the possession of Lily Salvatore and the Heretics.

History
Little is known about the history of the Phoenix Stone, and precious little information seems to be available on the subject, as none of the books Alaric sought out had any concrete information regarding the relic and its purpose. Bonnie mentioned in passing that the Phoenix Stone was a powerful artifact of Native American origin, but this has yet to be confirmed. What is known about the stone is that it is a metaphysical prison for the souls of what are described to be numerous "very old" vampires that were trapped inside. How a vampire's spirit comes to be trapped in the stone is also unknown, along with when the stone was created, the reason behind its creation, and just how many vampires' spirits have been imprisoned inside of it since it was first used.

In 1903, the vampire boyfriend of Lily Salvatore, Julian, had his soul imprisoned somehow within the stone by an unknown person. As a result of his imprisonment, his body was left with an X-shaped scar on the his chest, and the Heretics cast a spell on his body to preserve it until his spirit could be reunited with it. The stone then somehow came into Lily's possession, and she eventually brought it with her when she and the Heretics, Malcolm, Beau, Valerie Tulle, Mary-Louise, Nora Hildegard, and Oscar, were traveling to New York from London in late October of 1903. It can be presumed that Lily intended to use the stone to reunite Julian's spirit with his body, and that their reasoning for traveling to America was to do so, along with their plan to fulfill their revenge against the Gemini Coven, who had exiled the six Heretics as a result of their Siphoner nature in the years between the mid-1800s and early 1900s.

However, as soon as they landed in the New York harbor, the family was confronted by the Gemini Coven, who had heard rumors of the 3,000+ humans Lily and the Heretics had slaughtered in Europe since 1863 and sought to prevent them from massacring any more people. The coven used a mystical relic called the Ascendant to channel the power of the Aurora Borealis to trap Lily and the Heretics in a prison world using a spell of a Bennett witch's design, sealing them away in an alternate dimension that existed as a snapshot of November 1st, 1903 for the next one hundred years. The coven then burnt down the ship upon which Lily and the Heretics had traveled to America, which was full of the bodies of the human passengers they had fed on and left behind. Once the ship had been destroyed, the Phoenix Stone fell with the wreckage into the Atlantic Ocean, where, decades later, it would eventually be retrieved by scuba divers. Afterward, the stone was displayed in the Maritime Museum in New York until 2013.

Also in 2013, Lily and the Heretics were freed from their prison world-- the former by her son Damon, his girlfriend Elena, and their friend Bonnie, and the latter six by then-Gemini Coven leader Malachai Parker. Afterward, Lily resumed her plan to resurrect Julian by searching for the Phoenix Stone and sending Oscar out to locate Julian's body, which had become lost during their imprisonment.

Season Seven (FanFiction)
In A Nightmare on Sorority Row, the Phoenix Stone was in possession of Oscar, but the stone fell out of his pocket. It was taken by Damon.

Trivia

 * The Phoenix Stone is the first object that can resurrect dead vampires, but only if the vampire's body has been preserved and the vampire's soul has been trapped in the prison within the stone. This resurrection appears to require a specific spell based on shamanistic oral traditions that is cast by at least one witch.
 * It appears that this stone creates a channel between the spirit inside the stone and the body the stone is touching, which involves the bubbles inside the gemstone to swirl around in spirals as the connection is made. When the spell is successful, this bubble pattern is also seen in the irises of the resurrected vampire for a brief moment immediately after their resurrection.
 * According to Bonnie this object is evil.
 * This object is somehow important to the Salvatore family or to the Heretics, according to Lily.
 * It was discovered by divers in the Atlantic Ocean near the New York harbor after it was lost in the wreckage of the ship Lily and the Heretics traveled upon to get to America from London just hours prior to their imprisonment in the 1903 prison world by the Gemini Coven.
 * After its rediscovery, the Phoenix Stone was put on display in New York maritime museum, which was then secretly stolen by Alaric during the summer of 2013.
 * Julie Plec has said that for one little pink stone it can do a lot of damage.
 * It was revealed that Lily intended to use the Phoenix Stone to bring back her dead lover Julian, whose soul was trapped inside somehow in 1903.
 * Valerie, who loathed Julian after he beat her to the point of miscarrying the child she conceived with Stefan, attempted to prevent Julian's resurrection by killing Oscar, who had the location of Julian's body, as well as by trying to destroy Julian's body before Lily could find him. However, both of these plans failed, causing Valerie to live in fear of their retribution.
 * However, it was revealed in Live Through This that Bonnie had actually not resurrected Jo and Oscar at all, but had only reanimated their bodies by placing the spirits of two of the vampires trapped inside the Phoenix Stone within them.
 * Despite only Jo's body having been resurrected (while the spirit of a vampire prisoner of the Phoenix Stone controls it from within), it appears that the twins Jo was carrying at the time of their death have somehow been truly resurrected. How this was able to happen is still unknown.
 * According to Bonnie in I Carry Your Heart With Me, the Phoenix Stone is Native American in origin.
 * In Live Through This, Valerie revealed that the stone does not actually reconnect the spirits of the dead with their corpse-- instead, the stone contains many dead vampire's spirits imprisoned within it and can only be used to resurrect the vampires by placing their spirits back in their bodies.
 * However, this process requires not only the correct spell, but also the vampire's original body in order to be successful. While it is possible to put the spirits of the vampires into different bodies, it will likely result in the vampires in question will suffer negative side effects such as insatiable bloodlust, amnesia, and/or disorienting confusion.
 * The stone is similar to Freya's Talisman in that it can contains the spirits of others inside of it, as demonstrated when Freya placed the spirit of her brother Finn inside of the blue crystal pendant so she could heal his vessel and return him to his coven.
 * However, Freya's Talisman can be used for many other things than simply being a metaphysical prison for the souls of supernaturals, such as enhancing her own power and giving her another power source to draw from, whereas the Phoenix Stone seems to only have one purpose-- to imprison the spirits of vampires inside, and, if necessary, to reunite the spirits with their bodies.
 * Oscar described the inside of the Phoenix Stone's prison to resemble "a room in the basement," though it is unknown if the prison is solely one room, an entire building, or even its own global dimension, like the prison worlds.