If a non-Red Chest spawns hearts, coins, bombs and/or keys, causes the chest to spawn a second group of said pickups, effectively doubling the average pickup yield.
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Notes
Mom's Key cannot change the contents of a chest; it will only cause it to spawn extra pickups.
All other chest rewards (such as pills, cards, items, etc.) will not cause the chest to spawn additional pickups.
In-game Footage
Trivia
Mom's Key is the first item, by ID number, that was not carried over from Wrath of the Lamb.
The appearance of Mom's Key is a reference to Bowser's boss key in Super Mario 64 as well as the Boss Key in various Legend of Zelda games.
Prior to Repentance, this item's description was "Less is now more +2 keys".