Home to the Shy Guys in Paper Mario. The fourth Star Spirit, Muskular, was held here by the leader of the Shy Guys, General Guy and the Shy Guy Army.
The Toy Box is essentially a circular railroad with a number of routes leading off the railroads stations. The entire thing also seems to be inside a literal toy box, and entering it shrinks the people down to the right size.
After Mario, Goombario, Kooper, Bombette, Parakarry and Bow defeat Big Lantern Ghost, they meet Watt, who joins their team.