Skull Kids are a recurring race in The Legend of Zelda series. They are a race of diminutive, cursed skull-like beings that reside in forests. Whenever a Kokiri loses his or her way in the Lost Woods, he or she will become a Skull Kid. While Skull Kids tend to be friendly towards children, they fear adults and will attack them on sight.
Skull Kids look similar to Kokiri; the chief differences being that their skin is made out of wood, their eyes are a glowing yellow, and some have a beak instead of a mouth, though the Skull Kid mini-boss found in The Legend of Zelda: Twilight Princess does have a mouth.
Skull Kids also slightly resemble Imp Poes, with their small shape, mischievously violent nature and (in Twilight Princess) small lanterns. This could possibly mean Skull Kids are pre-Imp Poes, or be their living counterparts.
In Ocarina of Time, Skull Kids can be found in the Lost Woods. They are found playing flute-like instruments. While Link is a child, he can interact with them; however, when he is an adult, they will fire blow darts at him through their instruments.
Deeper into the woods, there are two Skull Kids on a tree stump. Link can play the ocarina notes they provide for him to obtain another Piece of Heart.
The Skull Kid is the main antagonist in Majora's Mask. Prior to the game's events, he steals Majora's Mask from the Happy Mask Salesman. With the power of the mask, he pulls the Moon out of orbit in hopes of it hitting and destroying the land of Termina. It is heavily implied at the end of the game that this is the same Skull Kid Link met in Ocarina of Time.
After Princess Zelda heals Midna and disappears, Midna and Wolf Link head to the Faron Woods to lift the curse Zant placed on Link. Deep into the woods, they find a maze, which they can navigate with help from a Skull Kid. With the light of his lantern, he leads the two through the maze, releasing Puppets along the way. At the end of the maze, he fights a battle with Link; once Link has won, the Skull Kid allows him entrance to the Sacred Grove.
Later in the game, Link must return to this area of the Faron Woods. The Skull Kid again leads him through the maze, engages him in battle, and lets him into the Sacred Grove. The Skull Kid thanks Link for the fun and says good-bye; he is not seen or mentioned again.
In the manga
In the Ocarina of Time manga, it is stated that while his family was on a picnic, a young boy who would become the Skull Kid Link befriends, ventured into the Lost Woods to catch a fairy. As he ran into the forest, his mother yelled at him to not go because he would get lost. Ignoring his mother's advice, he entered the forest and indeed became lost and couldn't get out. The forest was pitch black, causing him to become very scared. He entered the darkness of the forest and breathed in the dark air easily, causing him to gradually transform into a Skull Kid, the fate that befalls Hylian children, or Kokiri who venture into the Lost Woods.