Esoteric Alteration is a Legendary Gem in Diablo III. It can only be socketed into Amulets and Rings, and drops from Greater Rift Guardians. This gem was Season Two-exclusive, but once this season ended, started to drop for normal characters as well.
Damage reduction is multiplicative, not additive, to other similar modifiers; resistance bonus stacks directly to other similar enhancements.
This is one of the five gems (the others being Molten Wildebeest's Gizzard, Mutilation Guard, Invigorating Gemstone and Moratorium) that offer defensive, rather than offensive, bonuses. It has a leveling cap of 100, giving 60.0% non-Physical damage reduction.
As most Physical attacks are melee, this gem may be especially useful to ranged classes, who are generally not engaging in close combat either way.
Chuanyang of Xiansai designed a gem which would transport magical energies from their target to the workshop of his greatest competitor, Chau Thanh. He created several copies of this gem before he mysteriously disappeared.