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The skull is symbolic of wisdom and retained knowledge. When coupled with the teachings of the Mysteries of Occultism, such as the Fermentation Mysteries, the skull signifies that the inner nature or core of the person has been stripped down through initiation. Here the skull's death symbol can mean physical death, the dying of the flesh, or psychological death, the dying of the self. For this reason, among others, the skull was present during the initiation ceremonies of the Old Religion to signify the death of the old personality and the birth of a new consciousness.
The skull with crossbones stood for the God in old Pagan religions. The crossed bones beneath the skull symbolized the Slain God, and his resurrection from death. In Witchcraft when the skull is displayed on the front of the cauldron it symbolizes renewal through the transformation powers (see Transformation Mysteries) connected with the cauldron.
When associated with magic and mysticism the skull serves as a link to spirits of the Underworld by its association with death. The skull is believed to be a receptacle of psychic energy, which is the reason for its being placed next to divination tools such as the crystal ball and magic mirror. A.G.H.
Source: 78, 332-333.
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