A multi-functional precious stone testing apparatus includes a portable housing, a testing unit, and an indication unit. The portable housing includes a hand-held casing and a probe casing extended from a front end of the hand-held casing. The testing unit includes a conductive probe having a testing end portion extended out of a tip end of the probe casing for contacting a testing object to determine a conductivity of the testing object. The indication unit includes a LED light unit received in the hand-held casing for illuminating the testing end portion of the conductive probe during testing, wherein the LED light unit is positioned away from the tip end of the probe casing for preventing heat generated from the LED light unit being transmitted toward the conductive probe to affect an accurate measurement for the conductivity of the testing object.