Pegasus Castle is situated on the top of a hill on the Duelist Kingdom island. In the anime it was given a much longer staircase to the top. The Duelist Kingdom tournament finals took place here. To gain entry, a Duelist must insert 10 Star Chips into a lock. This rule also applied to visitors wishing to see Pegasus, during the tournament, including Seto Kaiba.
Pegasus has an annex, containing rooms for guests waiting to see him. Inside one such room is a screen on the wall, which Pegasus can use to contact people in the room.
In the manga, Croquet told Seto Kaiba he could go here, when he refused to let him see Pegasus. Outraged Kaiba took Croquet hostage in an annex room, demanding that Pegasus see him immediately. After receiving news that Yugi had gotten 10 Star Chips, Pegasus contacted Kaiba and told him to take 5 Star Chips, which he must wager in a Duel against Yugi. If Kaiba wins, then he may see him.
The dungeon is located underneath the castle. Two ways of accessing the dungeon are known. One is a doorway on the outside the castle that scanned a persons hand. If it recognized the handprint as authorized, they may enter. The other was a hidden passage inside the castle. It could be opened by leaning on a statue, causing a wall to slide across, revealing a stairway.
Kaiba was taken here by Kemo to see Mokuba. However Kemo triggered a hidden alarm and Kaiba fled. He managed to find Pegasus, who showed him Mokuba. Pegasus then trapped Mokuba's soul in a "Soul Prison" card in front of Kaiba.
Tristan went to the dungeon to find Mokuba's body, while Yugi Dueled Pegasus. He snuck around in a suit of armor and accidentally found the hidden passage, by falling onto the statue. Pegasus' henchmen found him, but Yami Bakura helped him escape, as he wanted to take Mokuba's soulless body as his new host.
The rooftop of the castle is a prominent location because it is where Yugi and Kaiba's Duel took place, with Yugi's friends on the archway of the wall and Keith Howard from a faraway tower window as audiences. As the Duel took a turn on Yugi's favor, Kaiba literally uses the battlefield to his advantage by placing himself at the edge of the turret, which leads to a long fall down the ravine, and uses that to threaten Yugi into forfeiting a chance of winning. With the prospect of Kaiba's death, Yugi gave up and Kaiba wins.
Pegasus' sanctuary was a private tower that overlooked the location of the tournament finals. This location was only present in the anime. It contained items to honor his memory of Cecelia.
While investigating the arena where Pegasus Dueled Kaiba to see if the former had been cheating Téa, Tristan and Bakura found a hole in the wall that would have allowed someone in the tower to spy on the Duel. Suspecting Pegasus of cheating they snuck into the sanctuary, by climbing up the side of the tower. However Pegasus confronted the intruders and, using his Millennium Eye, transported them to another chamber, where some occult activity took place. As Pegasus attempted to use his Millennium Eye on them, Yami Bakura countered with the Millennium Ring. Yami Bakura then transported Tristan, Téa and Bakura back to their rooms, causing them, as well as Pegasus, to forget the events of the night.
After losing to Yugi, Pegasus went to the sanctuary, where he released the souls of Solomon Muto, Seto Kaiba and Mokuba Kaiba. He also left a diary of his quest to revive Cecelia. Before he could leave, Yami Bakura faced him in a Shadow Game and took his Millennium Eye.
With Pegasus missing, Yugi and his friends went to the sanctuary to investigate, where they found the diary he left.