It was the obsession of Harold Oxley, who heavily researched the connection of the Skull to a Peruvian legend about a City of Gold.
Powers and physical makeup
The Skull was incredibly magnetic, even attracting metals that weren't magnetic by nature, like gold. The Skull also had psychic properties, being able to communicate on a primitive level with other creatures by staring into the eyes for prolonged periods. These powers also effected non-humans such as fire-ants, where Oxley used the skull to divert and deflect their attack on himself and Jones.
Behind the scenes
It serves as the title McGuffin at the heart of Indiana Jones and the Kingdom of the Crystal Skull.