The Cursed Diamond Ring is a golden band topped with a Midas Diamond, and the titular 'Curse' in Curse of Monkey Island. The ring, when placed on a persons finger, would turn its wearer gold. The magic surrounding the ring was so potent that even the Voodoo Lady could not counteract its power. She claimed its power originated from LeChuck's anger and intense frustration in dealing with the opposite sex. The only way to cure the curse was to remove the the ring and replace the diamond with a pure one of equal or greater value; both monetary value and emotional.
It was kept in the treasure hold of LeChuck's flagship, The Death Starfish, until it was taken by Guybrush Threepwood. Guybrush first used the ring to cut through the thick glass of a porthole, which flooded the hold, facilitating his escape.
After Guybrush managed to capsize the Death Starfish, he fell into the ship's treasure hold. Guybrush's first instinct was to escape the hold, though none of the items seemed to be of much use to his prediment. He then finds the large diamong ring underneath a Bag of Wooden Nickels.
Knowing that diamond can cut through glass, Guybrush cuts through one of the hold's porthole. The hold fills with seawater, enabling Guybrush to float to the surface. Once freed, he swam to meet his true love, Elaine Marley, on the shore of Plunder Island. There, he used the ring to propose to her, unaware of its vile curse.
Wally then appeared out of the blue, assuming the ring Guybrush had given Elaine had been LeChuck's cursed diamong ring. Within a matter of moments, the curse took hold and Marley was transformed into an immovable gold statue.
The game begins with the quest to find a cure for the curse. Guybrush needs to seek help from the Voodoo Lady to find out what he should do to break the spell. His journey takes him to Blood Island, where he needs to combine Minnie Goodsoup's wedding band and the Goodsoup Family Diamond.
The cursed ring vanishes after Guybrush pries it out of Elaine's finger.