Captain Woolbeard is a pirate ghost located within Bottomsup Bay who lost his Beard Ribbon. Mr. Richmond originally found it washed up onshore inside an old chest. He then gave the ribbon to someone who wanted it more than him; Nick Nack. After getting it back from Nick Nack, the player returns to the pirate ship. As he arrives, he sees that the B. B. Trio is about to con Woolbeard, but instead of fooling him they unleash his ghastly fury. The player then has to battle him (and win) to cool him down. Woolbeard then tells him that there is a book on team skills on his ship and gives him another Tacky Idol. When addressed, he will often say "WOOLY WOO" (with a varying amount of "o"s).
Once you have beaten the main storyline you have to go back to deafeat him for his watch.