The Rathalos Ruby is a jewel that is found deep inside a Rathalos. It is quite a rare item, but there is a chance the player can get it from High Rank and G rank quests. The Ruby is the equivalent of a Plate (low rank), and the Heavenly Scale (G rank). Some people go on Tail Runs (the slang for going on a quest and chopping the monsters tail off, and if you don't get the desired item you restart) for rubies, and others focus on breaking as many parts as possible on a rathalos. The logic is that the tail itself has the highest chance of obtaining a Rathalos Ruby (still within the 1~5% range). Using the Carving skill, one can carve the tail twice, squaring one's chances.
The ruby can be used to craft Rathalos Armor.