Mace is the aril (bright red, lacy outer covering) of the nutmeg seed shell. The broken parts of the shell are known as blades. Mace has a similar flavor to nutmeg, but is more powerful: more intense and slightly sweeter. Adding mace to a recipe adds fragrance to light or clear soups or sauces, without imposing too much flavor; because of its light color, it will not darken the appearance of a dish.
In the Middle Ages, nutmeg and mace grew in one spot on earth: the Banda Islands of present-day Indonesia. The Arab traders who sold spices to Venetian merchants kept the location of the source of this prized spice a closely-guarded secret, which it remained for hundreds of years. Because the yield of mace is much less than nutmeg's [1:100], it had and has a much greater value than plain old nutmeg. Today, nutmeg and mace are grown in numerous balmy locations from Indonesia to Grenada in the Caribbean.
Mace lends its bright orange, saffron-like color to light-colored foods, milk dishes like custards and cream sauces, and to potato recipes. Try mace in sweet potato and pumpkin or squash dishes as well.
Whole mace or ground? Whole blade mace is used for soups and sauces, and is a component of pickling spice blend, and figures in wine mulling spice mixtures. Powdered mace, in small doses, is a pleasing addition to sweet foods like pound cake and doughnuts, as well savory foods like meatballs and barbeque sauce.
*Little-known non-culinary fact: Nutmeg contains myristicin, which is reputed to be a strong deliriant [i.e., makes you delirious]. Never mind that it can make humans sleep for over 72 hours, one site says, "it is recommended not to feed eggnog to dogs." Because of its possible use as a hallucinogen, nutmeg is banned in Saudi Arabia.