The Mechanical Skull is a consumable item that summons Skeletron Prime. It will summon Skeletron Prime anywhere in both pre-hard mode and hard mode worlds, but must be used at night time or it will not work.
The Mechanical Skull's texture is based on a Skeleton's head.
The Mechanical Skull's sprite looks very similar to the Skull Lantern, just without the candle.
The Mechanical Skull seems to have a wind-up key, like a jack-in-the-box or a music box.
Skeletron Prime is sometimes known to not appear after having summoned it; this bug seems to be much more common in multiplayer than single player.
Using the Mechanical Skull while Skeletron Prime has already spawned will consume the skull with no affect. It is advisable to select a single skull with right-click and use it, rather than put it on a hotkey.
If you attempt to use the Mechanical Skull (or the other mechanical summoning items) at dusk, the item will not be used (which is supposed to happen) but when that night begins the respective boss will spawn naturally. This is a way to summon the hard mode bosses without using the item.