Special stones found only on the island of Greenaere, it comes in two varieties; Gold and Black.
Vlad Taltos carries both varieties of Phoenix Stone with him while he is running from the Jhereg in order to avoid detection from both Sorcery and witchcraft. He also has a container (which he crafted himself) which prevents the Black Phoenix Stone from working when inside it. At first, this was a simple pouch, but this has apparently since been replaced by a box.
Black Phoenix Stone[]
Black Phoenix Stone blocks psionic abilities, including psionic communication, and the use of witchcraft. (Interestingly, it does not disrupt the communication between a witch and his familiar, indicating that this form of communication is more profound than normal psionic contact.) Its effects occur within a radius of at least a few feet, so a person need not be touching it to be affected by it.
Black Phoenix Stone also prevents divine communication.
Gold Phoenix Stone[]
Gold Phoenix Stone blocks the use of Sorcery, except for Elder Sorcery. Presumably, it blocks the ability of the Orb to channel amorphia from the Greater Sea of Chaos. This makes it likely that the effects of Gold Phoenix Stone are primarily directed at necrophia. Spellbreaker was apparently made of the same (or similar) material.