The Mystic Melody is a floating, white glowing orb that emits transparent notes and small rings. Once obtained, it allows the character to play a "mystical melody" on a transverse flute. When using the Mystic Melody near an Ancient Ruin, it will create new paths through the stage. This can be helpful for most "Find the Lost Chao" stages.
For Sonic, his Mystic Melody is found in the Final Rush stage. After passing the sixth Star Post, grind down the rail in front of it and jump off it to a small platform that has a rocket once you near it. Take the rocket which will take you to a platform with a Item Box containing an extra life and head to the nearest platform with a spring. Jump off that spring and follow the path of platforms until you reach a vertical rail that leads to a higher platform. The Mystic Melody's Highlight will then be located at the end of this platform.
For Tails, his Mystic Melody is found in the Hidden Base stage. In order to get it, Tails has to possess the Booster and Bazooka. After the first Star Post, you will encounter a group of Kiki. After destroying this group, you can either take the left path (which is concealed by a block that can be destroyed) or the right path. Either way, they will both lead to the same path. At the end of this path some Iron Boxes are found inserted into the wall. Destroy them and the Mystic Melody's Highlight can be found behind.
Knuckles' Mystic Melody is found in the Wild Canyon stage. In order to obtain it, Knuckles has to possess the Shovel Claws. After taking the Wind Tunnel from the start of the level, glide to the left toward the pharaoh statue. Above the statue, dig into the painting to find a small room with the Mystic Melody.
Shadow's Mystic Melody is found in the Final Chase stage. After passing the third Star Post and entering the segment with the green cylinders, travel up the cylinders to the highest point possible on them in that area. At the top of one of them, you'll see a cylinder with an electrical fence and reach the top of this cylinder. At the top, there will be a small platform with a small ruin and the location of the Mystic Melody.
For Eggman, his Mystic Melody is found in the Sand Ocean stage. In order to obtain it, Dr. Eggman has to possess the Jet Engine. At the beginning of the level, stand on the turning platform and wait for it to have the long edge of itself to the left. Hover over to the small platform that is to the left, to find the Mystic Melody.
Rouge's Mystic Melody is found in the Dry Lagoon stage. In order to obtain it, Rouge has to possess the Pick Nails. At the start of the level, glide to the right (behind the two robots and the turtle). Dig then into the middle of the painting on the wall to find a small room with the Mystic Melody.
In the Sonic the Hedgehog comic series and its spin-offs published by Archie Comics, the Mystic Melody is a technique that has been passed down to each priestess of the Eusebes Temple and is an integral part of their duties. When played, it allows the user to initiate the reincarnation cycles of Chao, activate magic rings to power Meropis, sustain the watery shield that protects the citizens from harm and is even said to allow communication with ancient spirits. The present day users of the Mystic Melody include Coral the Betta, Pearly the Manta Ray, Tikal, and recently Amy Rose.
Mystic Melody is the only Level Up Item in the Sonic the Hedgehog series that all the playable characters in a game can have.