The Harmoniser was a machine devised by the Brains Trust, in the belief that removing emotions would remove all crime.
The Ultra-Harmoniser, located inside the Watchtower, wiped minds completely clean, and was used for 'hardened crimminals'. The moderators believed that they were curing members of Z.E.P.O, from the crime of feeling emotions.
When Freddy Feel-Good's mind was wiped by the machine, members of Z.E.P.O arrived to late to rescue him, but released the Fourth Doctor, who was due to be next.
When the blood bugs attacked Zombos, the Doctor changed the Harmoniser's output, giving the citizens adrenaline. The blood bugs began to die as they drained blood, as adrenaline killed them. However, the Doctor accidentally gave the citizens a copy of his exact emotions, causing them to all act like him.
A smaller Harmoniser was located inside civilians' homes, called a Harmony booth.