If the Pokemon is poisoned or badly poisoned, it will gain 1/8 of its maximum HP at the end of each turn instead of taking damage.
When a Pokemon with Poison Heal is badly poisoned, this has no effect on the Pokemon’s HP recovery but does affect the amount of poison damage incurred should the Pokemon lose its Ability while in battle. E.g. if Gastro Acid is used on the Pokemon after five turns in battle, it will incur poison damage starting at 5/16 (instead of 1/16).
Outside of battle
Poison Heal has no effect outside of battle. Poison will still have its normal effect on the user outside of battle in Generation IV.
Pokemon with Poison Heal