From Bulbapedia, the community-driven Pokémon encyclopedia.
Misty's special lure is a fishing lure created by Misty herself, to help with her fishing for Water-type Pokémon, debuting in EP035 in Japan and Bye Bye Psyduck worldwide. It is a small model of herself in chibi style. She believes it to be the best in her collection of lures, and gets sensitive when Ash is skeptical of this. In its debut in EP035, she introduced it as "The Kasumi Special".
She has used it herself several times. It appears to have undergone many redesigns, or possibly she has multiple lures of herself, but all versions depict Misty in her original outfit.
Misty had asked Professor Oak to deliver it to Ash as a gift when he met him in The Unbeatable Lightness of Seeing!. During the said episode, it was again referred to as ''Misty's Special''. He used it to fish for Buizel in Buizel Your Way Out Of This!, and when Dawn asked to use it, he refused, leading to a short squabble between the two. Later in the episode, Buizel stole their rods, including Ash's with the lure attached; however, it was recovered.