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Living Flame was a Legendary Crafting Material in Diablo III. It requires a Character Level of 1 to use, is account bound, and may be stacked up to 1000 times. It was required for the crafting of the Cinder Switch legendary two-handed axe. As of patch 2.0.6., it no longer drops, and existing Flames can be sold for 50,000 gold.
The item had a chance to drop off the unique Morlu Casters Sao'Thall, Rhau'Kye, and Malfeas the Abhorrent. All can be found in Act IV.
The morlu were known to use living flame to test one another's resolve.