Poison deals damage per turn and turns off the natural regeneration of its target, making it effective against trolls, kraken, and tentacle horrors. It can be inflicted by spiders, staves of poison, lichen, and monsters with the toxic mutation. The ability to inflict poison cannot be learned by allies. Damage from poison bypasses shielding effects.
Repeated poisonings increase the duration of the effect. With the exception of poison from lichen, they also increase the amount of damage taken per turn. The bar for the poison status shows the duration of the poison as a proportion of the creature's maximum health - if the poison bar is longer than the health bar, the poison will kill the creature, and the label will change from "poisoned" to "fatally poisoned".
The Staff of Poison ramps up exponentially, so it is one of the deadliest items in the game with relatively few enchants. However, you'll also want a way to get the enemy out of your way while it succumbs (a staff of Obstruction, Conjuration or Entrancement works wonders).