The "Eye of God" or "Truth" is a being that exists on the other side of the Gate. The nature of the entity is never fully revealed, as only its eye and a series of tendril-like black arms are ever shown. Whenever someone attempts Human Transmutation it drags them through the Gate and forces the truth into their minds.
Seeing Human Transmutation as an unfair exchange under the equivalent exchange laws of Alchemy, Truth draws the Alchemist into the Gate and forcibly takes their most valued attribute, or something symbolic of their relationship with the person they are attempting to create or resurrect. Truth will permit otherwise impossible exchanges when a Philosopher's Stone is used, as the Philosopher's Stone, or a part of it, serves as the payment for the exchange instead.
As a negative version or "conscience" of the alchemist who performs Human Transmutation, Truth is perceived by the finite human mind as punishing them for "Playing God" by abusing the power of Alchemy.
Truth presents itself as sadistic and cruel, but fair and wise in its rationality. Each transgression is punished by the loss of whatever the transgressor values most. For Edward, it is his ability to stand on his own two feet, taken through the loss of his leg. For Alphonse, it is the ability to feel his lost mother’s touch. For Izumi, it is her womb, the means to replace the child she lost and tried to bring back. Its presence serves as punishment for the ultimate transgression of human transmutation. Truth always acts according to what it perceives as fair exchange and will take from offenders by force if necessary. It holds no bias, opinion, or prejudice, viewing all who break the laws of alchemy as equal in their offenses and therefore deserving of equal retribution through the loss of what they hold dear.
Above all, Truth aims to uphold the laws that bind the universe and punishes any who attempt to perform acts that cannot or should not occur. Its seeming malice is ultimately a lesson: Truth seeks to teach humanity that alchemy is not everything, and that its practitioners must not view themselves as superior to others. This arrogance, born from the belief that one can control life and death, is the ultimate hubris behind all human transmutation. Life and death are to be accepted, not manipulated.