It is said to have the Flame of the Krazoa in it and it is a required item to gain access to the Ocean Force Point Temple.
At Cape Claw, Fox got the first gem after saving a LightFoot from attacking SharpClaw, who claims that the "Stinking liars", accused him of stealing their things. The LightFoot Tribe later capture Fox and attempt to torture him for being accused of stealing from the same LightFoot's "treasure". Fox pleads that the LightFoot "gave" the Fire Gem to him, but Chief LightFoot believes the story of his people and does not approve of theives. The Chief later admits Fox was innocent.