The Sky Island Saga is one of the major story arcs in the manga and anime series One Piece, created by Eiichiro Oda. It consists of two major arcs: the Jaya Arc and the Skypiea Arc. In the manga, this saga spans from volumes 24 to 32, covering chapters 218-302, while in the anime, the corresponding episodes are 144 through 195. In the anime adaptation, Konosuke Uda heads the saga that comprises the sixth season of the series.
The saga begins with the arrival of the Straw Hat Pirates at Jaya, one of the spring islands that comprise the Grand Line. They meet some important characters: Mont Blanc Cricket, who is a descendant of the famous explorer Noland and is in search of proof on the existence of a "City of Gold". Through the tale of Cricket, it is introduced into the adventure how "dreams" and "romance" are central to the One Piece narrative.
They also encounter Jaya's Bellamy the Hyyaena, a pirate who ridicules their dream of reaching Sky Island. This scene builds up a fight between idealism and cynicism, one of the fundamental themes throughout the series. The Blackbeard Pirates, with their captain, Marshall D. Teach, both become the antagonists as they make their first appearance in the Jaya Arc.
Most of this saga takes place on the Sky island of Skypiea, 10,000 meters above the Blue Sea. The Straw Hats make their way to Skypiea using the Knock-Up Stream: a vertical gale of immense power. It is indicative of Oda's genius at building a world. The island itself is created from "island clouds," a special material that allows for solid structures to exist in the sky.
Skypiea is ruled by Enel, who proclaims himself God, and has eaten the Goro Goro no Mi, which allows him to control lightning. The character design and powers of Enel come from Raijin, the god of thunder in Japanese mythology; this is yet another cultural reference applied to his work by Oda.
It introduces a number of new races and cultures: the Skypieans and Shandians are sky dwellers with small wings on their backs; another sky race, the Bilkans, are introduced through Enel and his priests. These groups enrich One Piece's world and raise issues of cultural friction and colonialism.
Upper Yard is actually a part of Jaya, which 400 years ago was shot into the sky by the Knock-Up Stream. It's one of the key conflict areas during the Skypiea Arc and relates to the mystery of the Void Century, where a span of 100 years was erased from history, which becomes one of the central plot points later in the series.
The Skypiea Arc also details advanced forms of Haki, most notably through Enel's Mantra, which was shown later to be a form of Observation Haki. This foreshadows the appearance of Haki in later arcs and adds depth to One Piece's power system.
An important factor of this saga is that it has some link to the overall plot of One Piece. The Poneglyph, which had been discovered in Skypiea, gives important information about the Ancient Weapons and the Void Century—directly related to the mystery of the world's history. Thus, the Skypiea Arc is most likely the most important in the series for long-term plot development.
This saga also contains some of the most creative and memorable fights in the series. One of the most famous and exciting is Luffy fighting Enel, which really works out how Luffy's powers of rubber make him a natural counter to Enel's electricity abilities. It really shows how Oda has smartly thought through the interactions between the Devil Fruits.
Though very important to the plot, this Saga has been underrated in relation to other Sagas by many fans. The vast change of setting and too many innovations made it hard to track for some viewers. However, many fans and critics argue that it is the highly unique setting, vivid and beautiful world-building, with many connections to the greater mythology of One Piece that make it one of the most significant and rewarding parts of the series.