The Scarlet Key is the master key to the most heavily-guarded areas claimed by the Scarlet Crusade - the Armory and Cathedral wings of the Scarlet Monastery.
The key was also once used to open the Scarlet Bastion in Western Stratholme; this requirement was removed during patch 3.2.0.
This item drops from the static chest (Doan's Strongbox) behind the final boss, Arcanist Doan, in the Library wing of the Scarlet Monastery in Tirisfal Glades. The chest is lootable by everyone, and the key is automatically placed in the keyring.
Obtaining this key is a criterion for [The Keymaster].