Pearls are considered a gem even though they are produced by a live animal. Most people are aware of how a pearl is formed. A tiny speck of sand or grit finds its way into the oyster. The oyster has a need to protect it's soft body so it covers the speck with layers and layers of the shell type substance that lines it's shell. Soon the speck is no longer a sharp piece of grit but another part of the oyster's shell.
Humans, in a effort to speed up the process of the pearl production will often put a plastic bead into the oyster's shell in order to encourage the oyster to put layers on the bead. The pearl's value is based on how many layers of oyster shell it has around the speck. The more layers the higher the price. Also the color of the pearl can vary from black (which are often dyed) to pure white.
The more highly valued pearls are natural pearls, not cultured. For more information on pearl culture go to the "pearl basics" page at this website that sells Pearls.