Virus (The Scrolls of Rassilon)

According to one account, a virus was responsible for the Time Lord abilities of regeneration and rapid healing. It naturally created an elite group on Gallifrey - the Time Lords - by only granting its beneficial effects to 5% of all infected Gallifreyans. 10% of those exposed to the virus were killed by it. 85% of Gallifreyans were unaffected by the virus. The virus spread through contact.

Infected males were twice more likely to become Time Lords than females. There was a 1 in 10 chance that Time Lord abilities would be passed down to the children of Time Lords.

The regenerations caused by the virus enhanced the body, adding several features including a double circulatory system. With each regeneration, the levels of viral activity in a Time Lord would slightly decrease. After 12 regenerations, there would not be enough viral activity for another regeneration.

The virus was developed by Thremix with funding by Rassilon. When Rassilon released the virus onto Gallifrey, the High Council covered up the deaths caused by it by attributing them to a leak in an old germ warfare plant. Pandak III theorised that Thremix may have made a second strain of the virus that granted limitless regenerations and that Rassilon may have infected himself with the virus and then had Thremix assassinated so that no one else could become completely immortal. (PROSE: The Scrolls of Rassilon)

Atraxi returned to Gallifrey after the end of the Eternal War, finding that Rassilon had risen to power after the planet was ravaged by plague. Atraxi died soon after to the virus. (PROSE: The Pit)

"[Atraxi] had returned, expecting a hero’s welcome. But the people had forgotten the warriors. The plague had ravaged Gallifrey. The scientists had done nothing to prevent it. Only a few survived. Many of the politicians, the law givers and the great leaders were dead."

- Atraxi's observations on Rassilon's plague

Later, Kopyion Liall a Mahajetsu spoke to the Seventh Doctor and William Blake of the change of power the occurred directly after the Eternal Vampire, mentioning that "the virus had annihilated all those who knew of Rassilon’s great mistake." (PROSE: The Pit)

Behind the scenes
John Peel further explores the idea of a virus being responsible for Time Lord biology elsewhere in The Gallifrey Chronicles. He explains the virus as being a biological nanomachine. Regeneration is said to be like instantenous body-wide surgery performed by the machines, with personality changes as a side effect. Peel posits that the first time a Time Lord regenerates, the virus gives them a body with a second heart, telepathy, and a very low sex drive.

An illustration by Trevor Baxendale of nanomachines in a Time Lord's bloodstream accompanies the section on regeneration.