The Green Shell is an item and a power-up shell that Koopa can acquire. It is obtained when you start a new game, hitting a ? Block and also from the Power-Up Pipe. It also prevents Koopa from losing a life. It is equivalent to the Super Mushroom from Super Mario Bros. 3.
Getting hit by an enemy or a certain obstacle (ex: fireballs, etc.) will cause Koopa to lose his shell.