Obsidian is a popular gemstone. It is often cut into beads and cabochons or used to manufacture tumbled stones. Obsidian is sometimes faceted and polished into highly reflective beads. Some transparent specimens are faceted to produce interesting gems.

The use of obsidian in jewelry can be limited by its durability. It has a hardness of about 5.5 which makes it easy to scratch. It also lacks toughness and is easily broken or chipped upon impact. These durability concerns make obsidian an inappropriate stone for rings and bracelets. It is best suited for use in low-impact pieces such as earrings, brooches, and pendants.

Obsidian is also used in making opal doublets and opal triplets. Thin slices or chips of opal are glued to a thin slice of obsidian to make a composite stone. The black obsidian provides an inexpensive and color-contrasting background that makes opal’s colorful fire much more obvious. It also adds mass and stability to the opal that facilitates cutting it into a gem.