"The Hōgyoku wasn't just something that turn Hollows to Arrancars, or extreme regeneration. Those are just parlor tricks. The real power the Hōgyoku holds... can doom us all."
The Hōgyoku (崩玉, Crumbling Orb; Viz: "Breakdown Sphere") also referred as the Orb of Distortion, is a unique substance in the form of a small orb that can dissolve the boundaries between a Shinigami and a Hollow, granting either the powers of the other. It was invented roughly 100 years before the main events of the story, by ex-leader of Shinigami Research and Development Institute, Kisuke Urahara.
During Urahara's time in the Research Institute, an answer was sought on how to strengthen an individual's soul, the answer being for a Shinigami to gain Hollow powers through Hollowfication. This led to the development of the Hōgyoku, though once he had created it, Urahara immediately placed a seal upon it when he understood how dangerous it was.
Urahara was forced out of necessity to first use the Hōgyoku roughly 100 years before the storyline to save the lives of Shinji Hirako and a group of other Shinigami, who were undergoing forced Hollowfication caused by Sōsuke Aizen. Though the Hōgyoku failed to stop the Hollowfication, their souls were stabilized thanks to Urahara. They were outcasted from Soul Society and fled to the world of the living with Kisuke, who brought the Hōgyoku with him and swore to find a way to reverse Hollowfication. Eventually the group of Shinigami gained control over their new-found Hollow powers and became known as the Vizard, rogues rumored who "gained Hollow powers through illegal means".
Sometime after, Kisuke sought a means to destroy the Hōgyoku, though all attempts proved to be ineffective. Out of desperation, he deactivated it and placed it within the depths of a person's soul, Rukia Kuchiki's soul. By giving her a defective Gigai, which would eventually turn her soul into a normal human soul permanently, he hoped it would hide the Hōgyoku forever. His plan failed, however, when Sōsuke Aizen betrayed Soul Society to retrieve it. Aizen delved into Urahara's research and discovered two ways to extract an object from a soul: the first is to destroy the soul, with such an instrument as the Sōkyoku, used for Shinigami executions. This failed when the Sōkyoku was destroyed by Jūshirō Ukitake and Shunsui Kyōraku, so Aizen resorted to the second method. Using a device invented by Kisuke himself, Aizen extracted the Hōgyoku from Rukia's soul and retreated into Hueco Mundo.
Though he gained possession of it, the Hōgyoku was rendered dormant by Kisuke, and needed time to 'fully awaken.' Aizen discovered a way to bypass this supposedly without the knowledge of Soul Society or Urahara himself. The Hōgyoku can be fully awakened, if only for an instant, by allowing the Hōgyoku to fuse with someone who possesses an amount of spiritual power surpassing a Shinigami Captain, that being Aizen himself. Aizen uses the Hōgyoku and begins to create his Arrancar army, consisting of Hollows granted Shinigami powers.
Later, Aizen has his Arrancar capture Orihime Inoue due to her special ability, her Shun Shun Rikka. He reveals to her that every time the Hōgyoku is used, its power deteriorates somewhat, and so he brought her to Hueco Mundo to repair it. As a sign of trust, he shows her the Hōgyoku itself, which inspires her to seek to negate its existence with her powers, rather than heal it. Aizen's reasoning for capturing her is later proved to be a ruse, as he brought Orihime to Hueco Mundo in the hopes of luring away some of the Gotei 13 captains so he may invade Karakura Town with less resistance. Aizen later reveals that he has embedded the Hōgyoku into his body. As the fight drags on, Aizen explains more about the Hogyoku, and his body, with the Hogyoku in it, undergoes a transformation.
Years after Aizen's death, the Hōgyoku falls into the hands of Takashi Sora who uses it to churn out his own army of Arrancar and then turns it on Koga Tensei, which transforms him into a Seiatsu at the price of the Hōgyoku itself going back into it's dormant state.
The Hōgyoku is a unique substance in the form of a small, light purplish spherical stone. It has the power to materialize a person's inner desires. Its power can turn a Shinigami into a Vizard, or a Hollow into an Arrancar.
It is explained that though Hollows can naturally become Arrancar, the difference in power is small. Artificially creating Arrancar with the Hōgyoku is said to unlock a great deal more of said Arrancar's potential power.
According to Tessai Tsukabishi when he first witnessed it, the Hōgyoku has an overbearing power which is unlike anything else in Soul Society, and completely unrelated to Reiatsu. It has a presence which, according to him, feels as if it's trying to stifle his very existence with its power.
However, immediately after its creation, the Hōgyoku was placed within a strong seal and rendered dormant by its creator, Kisuke Urahara. Once Aizen gained possession of it, the Hōgyoku was released of its seal, but still needed time to awaken from dormancy. Aizen later discovered through releasing it from its 'prison' and touching it directly with his hand that this dormancy could be bypassed, something he imagined not even Urahara understood. By uniting the sleeping Hōgyoku with someone of higher than Captain class reiatsu, it can briefly be used as if in its awakened state.
Desire Materialization: According to Aizen, the Hōgyoku possesses a will of its own. Though initially thought to solely possess the power to control the boundary of the two contravening existences, that of Shinigami and Hollow, this was proven incorrect, as the Hōgyoku's "true power" is the ability to capture and materialize the hearts of everything that exists around it. Aizen claims that all the events that happened around Ichigo Kurosaki, Rukia Kuchiki and Kisuke Urahara were events materialized by the will of the Hōgyoku.
- Healing: The Hōgyoku also has some healing properties, as it is able to heal the injury inflicted upon Aizen, who had embedded it into his body, by Ichigo Kurosaki. Aizen explains that the Hōgyoku is instinctively protecting its master. It passes this ability along to Koga when he is turned into a Seiatsu.
Power Transferal: According to Dark Koga, Takashi Sora began to suspect that the Hōgyoku had a yet undiscovered power. He tests this theory by willing the Hōgyoku to give life to the very desires of Koga Tensei, causing the Hōgyoku to transfer all it's power into the boy, making him a Seiatsu. After this, the Hōgyoku lost all of it's power.
The ability of the Hōgyoku is to materialize the hearts within its vicinity. If the target does not essentially possess the power necessary to beget their desires, however, then it is impossible. In that sense, it can be called a "Power that guides in the direction of desire".
Aizen explains to Orihime that every time the Hōgyoku is used, it begins to deteriorate, which is why he needs her to heal it. However, this is later proven to not be his true reason for bringing her to Hueco Mundo. Whether the deterioration of the Hōgyoku is true or a fabrication remains to be seen.