The Cloaking Device is an item in Super Smash Bros. Melee that makes the user invisible. Damage is not dealt while a character is invisible (not even self-damage), but knockback still applies, meaning invisible characters can still be KO'd without damage. While invisible, each opponent KO'd will add points for an Invisible KO bonus. The invisibility lasts 10 seconds. Slippy hints in one event match that the Cloaking Device is of his own invention; however, the trophy and look of the device makes reference to Perfect Dark.
The Cloaking Device made its first appearance in Perfect Dark. The Cloaking Device was an item that uses a refractive field to make whoever is using it invisible. The item is useful as the enemies aren't able to see the player using it; however, when the player fires his or her guns, the person turns visible again. Enemies in Perfect Dark are also able to use the Cloaking Device. In Melee, the Cloaking Device makes any player who uses it invisible. When a player gets hit by attacks, no damage will be taken, unlike in Perfect Dark. Also, when the player attacks, the invisibility is disrupted, making the player visble for a short period of time. 
 In the Super Smash Bros. series
Using names allows an invisible player to easily track themselves, as the tag is still visible while cloaked, and any personal props they use, such as Mario's cape, or Link's Hookshot. Characters themselves are not completely invisible - the cloak flickers about one every three or four seconds, and the faster a character moves, the more obvious they become (becoming temporarily completely visible when attacking). The transparency effect is generated by environment mapping, which also makes the character's outline visible when in front of any opponent, item, or special effect.
Since players are unable to see their own cloaked characters, the primary benefit of the item is the damage immunity. Computer-controlled characters are not affected by the Cloaking Device and continue fighting as if the opponent was not cloaked at all.
While the item itself is absent, in Super Smash Bros. Brawl's Special Brawl mode, a modifier named "Clear" is available. Turning this option on makes all characters invisible, similar to the effect caused through use of the Cloaking Device. However, the Cloaking Device itself does not return (most likely its affiliation with the now-Microsoft-owned Rare). Unlike the Motion-Sensor Bomb, however, no new item was introduced to replace it.
Additionally, in Co-Op Event 6: Unwanted Suitors, the opponents will be invisible in the same way.
Similar to when the Nintendog is summoned, name labels will also be hidden during clear Brawl.