Kapala, Sanskrit for “skull”, are ritual cups used in Buddhist and Hindu Tantric ceremonies as a reminder of the temporary nature of life and the physical existence. Monks recover the crania used to carve kapala from sky burial sites or from bodies pulled from the Ganges River. These skull cups are sacred because of their ritual purpose not because they come from the remains of a holy person or an ancestor. Once the crania are cleaned, monks will carve elaborate designs in them and decorate them with precious metals and jewels, then consecrate them before use.
Skull cups are used during higher tantric meditation to achieve a transcendental state of thought and mind within the shortest amount of time. Kapala are also use to hold drink offerings for the gods and deities to win their favor. Tibetan Lamas use skull cups on an altar to hold dough cakes or wine, that represent flesh and blood, as gifts to the Deities.
More intricate examples of ritual skull cups can be seen here.