The Catalyst is an artificial intelligence that appears in the final minutes of Mass Effect 3. It appears before Commander Shepard on the deck of the Crucible in the holographic form of a child, and states that it is the being responsible for the function and control of the Reapers. It conceived the Reapers as a means to prevent the spread of chaos, under the belief that synthetic beings will always rebel against their organic creators. The Reapers thus sweep through the galaxy in a cycle, returning at regular intervals to wipe the slate of galactic civilization clean before all organic life has a chance to be annihilated through a synthetic uprising.
However, the presence of Shepard on the Crucible puts the Catalyst under impression that this plan won't work anymore, and presents the commander with with three possible options through which the Crucible can bring an end to the Reapers as a threat. It can be used to either destroy the Reapers and all synthetic life, to take control of the Reapers at the cost of Shepard's own life, or, once again with Shepard's sacrifice, merge all organic life in the galaxy with synthetics.
The introduction of the Catalyst in Mass Effect 3's endgame was harshly criticized. Upon its introduction, the Catalyst does little to explain what it is or its reasoning behind the Reapers. It is merely a deus ex machina, meant to guide the player into picking one of the three potential ending paths. Further, the basis of its argument behind the Reapers is flawed. Namely, the Reapers, synthetic beings, destroy galactic civilizations comprised of organic beings so that the organics aren't killed by synthetics.
The outcry against the Catalyst and other narrative faults in the game's ending led Bioware to create a downloadable "Extended Cut" update to fix many of those issues.
In the Extended Cut version of Mass Effect 3's ending, Commander Shepard is given the opportunity to pry further into the Catalyst's origin. It was created many cycles ago in order to serve as an arbitrator in a conflict between organic and synthetic beings. The Catalyst couldn't resolve the conflict through diplomatic measures, however, and thus devised the Reapers.
The Extended Cut also provides a fourth ending option. Rather than select any of the three standard options, the player can draw their gun and shoot at the Catalyst as a means to refuse them all. With the options refused, the Catalyst will depart, stating that the cycle will continue. Because Shepard refuses to use the Crucible, the war against the Reapers is lost, but the next cycle is able to find peace thanks to records of the war left behind by Liara.
If the Mass Effect 3 DLC Leviathan is completed, Commander Shepard is given the opportunity to talk to the Catalyst about the connection between the Catalyst and the Leviathans.
Billions of years ago, the Leviathans were the apex of life. Aware of the cyclical conflict between organic and synthetic beings, the Leviathans created the Catalyst in order to preserve life. However, the Catalyst betrayed them and chose them as the first harvest. Thus, the first reaper, Harbinger, was created.