When another Pokémon on the field uses a single-use held item, a Pokémon with Pickup will obtain the used item (if it is not already holding anything), allowing it to be used again. A Pokémon with Pickup can also obtain an item thrown at it with Fling, if it has no held item.
In Generations 3-4, Pickup has no effect in battle.
When a battle ends, any party Pokémon with Pickup has a 10% chance of picking up an item, provided it is not already holding one.
Items picked up range from basic items like Potions, Great Balls, and Rare Candies to rarer items such as Leftovers and certain TMs. Higher-level Pokémon are more likely to find better items.