Castle Grayskull is a castle that forms a central location in the Masters of the Universe toy/comic/animation universe and also appears in the 1987 live action adaptation. The concept is credited to Donald F. Glut. The toy set was invented by Roger Sweet. Castle Grayskull was a "major feature of Mattel's line", and was "one of the most famous playsets of all time".

In the storyline of the franchise, it is the target of numerous attacks by Skeletor, Hordak and the Snake Men, all of whom believe that the secrets inside will allow them to conquer Eternia and the entire universe, and become the titular Masters of the Universe. Castle Grayskull plays a key role in the transformations of both He-Man and his twin sister She-Ra in the 1983–1985 He-Man and the Masters of the Universe series, and in its 1985–1987 spinoff/sister series She-Ra: Princess of Power.

Gary S. Cross, professor of modern history at Pennsylvania State University, writes about Castle Grayskull in his book Men to Boys: The Making of Modern Immaturity (2008). He contends that Castle Grayskull was emblematic of the making of a "boy-man culture" in the 1980s. According to Cross, the "boy-man culture" refers to a cultural shift where adult men increasingly resist traditional markers of maturity, such as domestic responsibility and career advancement, in favor of retaining adolescent interests. This "modern immaturity" is characterized by an embrace of youth-oriented consumerism, including video games, comic books, and fantasy collectibles (like Castle Grayskull), which blurs the lines between fatherhood and boyhood.

Castle Grayskull was conceived as the central location for the battle between the forces of good and evil. The original playset was released in 1982, and all other depictions of the castle originate from it. It is a large hollow green castle, consisting of two halves connected by a hinge. The toy is designed to open for play and close for storage. A carrying handle is molded into the top of the castle. A large skull decorates the front, with a hinged "Jawbridge" allowing access to the interior, through the "mouth" opening. The interior has a throne room, elevator, and a trap door. Multiple accessories are also included – a ladder, removable flag pole, turret cannon, weapons rack with nine weapons, and a "battle trainer" device.

When the initial Mattel toy line was introduced in 1982, the He-Man and Skeletor figures each came with half of a plastic sword which could be joined into one "complete" sword, corresponding to the storyline in the included mini-comic. Together, the combined sword was used as a key to open the jawbridge to the Castle Grayskull playset. According to the original storyline, the Sorceress (as she is called in the very first minicomic "He-Man and the Powersword") had split the sword into two and scattered the pieces, in order to protect the castle and its source of universal power.

The toy set was the centerpiece of the toy line, and sold more than 3.5 million units.

An early concept sketch by Mark Taylor featured "the Dwell of Souls", an idea that evolved into Castle Grayskull; it featured a skull-shaped entrance. The original packaging art by Rudy Obrero showed Skeletor inside the jaw bridge; which was done because Mr. Obrero had not been given a storyline at that point and he thought to himself that it might be Skeletor's base.

The original concept art and prototype show a large swamp surrounding the castle, which was going to be printed on a playmat that would be positioned beneath the playset. This moat playmat was not included with the finished toy, in order to keep costs down.