Lodestones are naturally magnetized rocks: specifically, a mineral known as magnetite.
Lodestones have two uses in navigation. First, they may be used as compasses in and of themselves. If they are hung from a rope, they will naturally turn until the north pole of the magnetite points towards Earth's north pole. Second, and more common, they can be used to magnetize iron or steel needles. By rubbing a piece of ferrous metal with a lodestone one can magnetize the smaller metal, which is useful for replacing compass needles when they rust or lose their magnetism.
The magnetic property of lodestone was known by the 6th century BCE. Its use as a compass dates to the 11th century CE in China, and about 1300 in Europe.
- Lodestone and the Needle from Ocean Navigator. An article on the history of magnetic navigation.
- Navigation before Netscape from History Magazine. Includes multiple types of navigational aids, but focuses on compasses and lodestones.
- Wikipedia's pages on lodestones and magnetite.
- An Armed Lodestone at the Museo Galileo - the same shown in the images above.