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The Medallion is a key item in Port Royal's story in Kingdom Hearts II and Kingdom Hearts II Final Mix. One of 882 cursed Aztec coins will curse anyone who has held it to became an invulnerable ghoul until all of the coins are returned to their chest. Port Royal's representative Keyblade, Follow the Wind, features a medallion as the Keychain.
In the first visit to Port Royal, Elizabeth Swann was kidnapped by Captain Barbossa because she had a medallion in her possession and said her last name was "Turner." After rescuing her, it turns out that medallion was originally Will Turner's that she stole because she thought he was a pirate and would be killed.
In order to defeat Barbossa, Jack Sparrow, after stealing a medallion to become invincible, and Will have to shed their own blood and return their medallions to the Aztec Chest.
The second visit starts with a fight against cursed pirate which has Sora and co. thinking someone stole a medallion. Jack claims he hasn't and Elizabeth rushes to tell them that Will went to check on the Aztec Chest but he hasn't returned.
While on the way to the Isla de la Muerta, Jack, Sora and company meet Luxord, a member of Organization XIII, who has taken the chest from the island. After a fight with the Grim Reaper Heartless, Luxord admits defeat but takes and throws four medallions to Gambler Nobodies. The Grim Reaper then reappears and cast Jack, Sora and co. onto the empty Interceptor which is then blown up by Luxord with the Black Pearl's cannons.
Upon waking up, the group finds themselves in a Ship graveyard and Jack has been cursed. Jack claims that they must find the four medallions and then return them to the chest for the curse to be lifted. The medallions are in all the different areas of the world and are carried by the Nobodies.
After finding all four, the group heads toward the town and finds the Grim Reaper and the Aztec chest there. The boss battle that follows requires the player to collect all the medallions that are missing from the chest. Once they are all there, the group can finally damage the Grim Reaper. But the Grim Reaper can steal the medallions from the chest or the ones that Sora is carrying. The only way to make the Grim Reaper drop medallions is to use magic against it.
After the fight, Will asks if there is anything that they can do for Sora and Jack says he has an idea. Once out at sea, Jack drops the chest off of the Black Pearl into the ocean where the medallions will no longer be a problem.