In the episode 1.01 - Treasure of Zeus, the chalice is said to be made by Zeus as a wedding present to Hera. It is made of ruby-red crystal and is kept inside a cave up in the mountains that is dedicated to Hera. Zeus promised Hera that anyone who takes the chalice from it's rightful place is condemned to death. Hercules, Iolaus, and Jason venture through the cave, past the booby-traps, and into the main chamber to steal the chalice. Inside the chalice is a small amount of clear liquid that appears to be water, but when the liquid is dumped out of the chalice and onto the underlying rock, it ignites into a fireball that nearly roasts the boys as they run out of the cave. The fire also releases the Phoenix guarding the cave to attack the boys come morning's light. Iolaus and Jason eventually return the chalice to Hera's Cave in the episode 1.03 - What a Crockery in order to reinstate Zeus's protection over Hercules.
The storyline bears a remarkable resemblance to Zeus's Urn.