The Time Capsule is a mechanic in Pokémon Gold, Silver, and Crystal that allows players to trade Pokémon back in time to Pokémon Red, Blue, and Yellow. It is not present in Pokémon HeartGold and SoulSilver.
A permanent fixture in every Pokémon Center, the Time Capsule is the only facility which allows direct inter-generational trades. Starting with Pokémon Ruby and Sapphire in Generation III, this is no longer possible in the games, although it is possible to migrate Pokémon forward a generation through use of Pal Park (from Generation III to Generation IV), the Poké Transfer (from Generation IV to Generation V) and the Poké Transporter (from Generation V to Generation VI). Pokémon can no longer be "sent back in time", i.e., they can no longer be directly traded back to a previous generation game.
The Time Capsule is located on the second floor of each Pokémon Center. However, it will be under repair and unavailable until the player has met Bill in Ecruteak City. Even then, the player has to wait for another 24 hours in the game's internal clock before being able to use the Time Capsule.
After this point, it is possible to trade with the Generation I games; however, there are still some restrictions:
- The player cannot have any Generation II Pokémon or Eggs in their party.
- None of the Generation I Pokémon that are in the party can know any Generation II moves. However, it is possible to trade a Pokémon into Generation I with a moveset that is only obtainable in Generation II, as long as said Pokémon and moves were introduced in Generation I (e.g., Alakazam with Fire Punch).
When linked up to a Generation I game, the trade will happen as it did in Generation I, and the Generation II game will act as if it is a Generation I game.
Held items of Pokémon traded from a Generation I game are determined by that Pokémon's catch rate in said game. This is why Pikachu hold a 
Light Ball or why Kadabra hold a 
TwistedSpoon if traded from Pokémon Yellow but not from Red and Blue.
Limitations and their consequences[]
Because of the restriction that moves introduced in Generation II cannot be traded back to Generation I, a Move Deleter in Blackthorn City will delete moves that are incompatible with earlier games. While trades with previous generations were not supported in any games after Pokémon Gold, Silver, and Crystal, the concept of a Move Deleter was retained as part of gameplay, as otherwise it would be impossible to make a Pokémon forget an HM move.