Telepathic circuits

Telepathic circuits are a component of TARDISes that allow communication with the Time Lords. and other alien races (DW: Frontier in Space, The War Games)

Additionally, this is the element of the TARDIS systems that allows its occupants to understand and speak languages other than their own. The TARDIS's pilot seems to be an integral part of the telepathic circuits; if the Time Lord is unconscious or severely injured, the translation effect may not work correctly. (DW: The Christmas Invasion)

While the Doctor's companions hear and speak their native languages and do not perceive the translation effect, the Doctor himself is aware of the translation and whatever local language is being spoken. (DW: The Fires of Pompeii, The Girl in the Fireplace)

Should someone benefiting from the translation effect attempt to override it and deliberately speak the local language, it comes across to the locals as garbled up. It also seems that the listener (at least in Earth's past, present, and future) hears something similar to the language of the speaker's native culture in that time period. It is also possible that the listener simply hears the native language of the speaker without comprehending it. (DW: The Fires of Pompeii)

The translation circuits translate writing as well as speech. (DW: The Fires of Pompeii) They do not work on languages that the time lords themselves dont know. (DW: Four to Doomsday, The Impossible Planet)

The telepathic circuits can also be used to alter minds in other ways. The Seventh Doctor used his TARDIS' telepathic circuits to erase some of his useless memories, accidentally erasing Ace's memory as well. (NA: Timewyrm: Genesys) When he restored her memories to her, he accidentally gave her some of Melanie Bush's also, allowing her to remember Paradise Towers. (NA: Timewyrm: Revelation) On another occasion, the Doctor was able to transfer his entire conscious mind into the TARDIS telepathic circuits, erasing his own memories while protecting his conscious mind from a telepathic assault that was attempting to provoke him into killing Ace (PDA: Matrix).