Treasure Bags are consumable items obtained in Expert Mode as a reward for defeating bosses. Its contents depend on the boss it comes from. It is opened by either right-clicking it inside the inventory or using it while it is in your hand. In multiplayer, each player that is online at the end of the battle receives one Treasure Bag each. Treasure bags are client-side and will despawn if you exit the world.
Each Treasure Bag contains the boss's usual drops from normal mode, along with one Expert Mode-exclusive item(pink-highlighted items below)— with the exception of the Lunatic Cultist, who currently does not provide an Expert Mode-exclusive item. Hardmode bosses' Bags additionally have a 5% chance to contain one random set of developer items.
In addition to the above, all Treasure Bags from Hardmode bosses have a 5% chance to contain a random set of developer items when opened in an Expert World:
A light pet that senses nearby enemies, treasure, and ores.
Notes
In muliplayer if players are too far away from the boss towards the end of the fight, a treasure bag may sometimes not drop for them, regardless of how much they have contributed. So it is advisable to be close enough to witness the bosses demise onscreen towards the end of the fight.
Additionally in Multiplayer, participation is based on damage dealt to the enemy. It is possible for a player to not receive a bag if they did not contribute enough damage to the battle.
It is advisable to open bags on the ground in a quiet area as the delay in picking up the prizes can cause items to fall to other players.
Treasure yields are considerably higher in multiplayer- multiple bags are handed out, with each containing the entire reward of a kill, and drop rates on the boss's unique items are often doubled.
Trivia
Duke Fishron's treasure bag resembles a pig from the popular mobile game, Angry Birds.
History
1.3.0.4: Fixed Treasure Bags disappearing after death.