The Owl Badge is a Key item found in Momodora III.
The Badge is given to you by Bellkeeper Poetelia after her defeat. Upon seeing that Momo/Dora is stronger, she asks for peace and gives her this valuable item.
The Owl Badge itself has no effect, but it can be trade with Melilot to obtain the Karstian Seed, which is then used to upon a door to the Distortion in Time.