The Nationwide Transmutation Circle (国土錬成陣, Kokudo Renseijin), as it is most often referred to, is a gigantic Transmutation Circle being dug in the form of an interconnecting underground tunnel that travels all around the nation of Amestris. The shape that the massive array takes appears to mirror the mysterious double pentagon circle that was first discovered by Edward Elric in Laboratory 5 - the Transmutation Circle designed to create a Philosopher's Stone. When activated, the Nationwide Transmutation Circle consumed the lives of every human being in the country and fused them into an enormous Stone used by the mysterious being known as Father.
Just as a normal-sized Philosopher's Stone Transmutation Circle is powered by a number of live humans placed at multiple intersecting points, the Nationwide Transmutation Circle is designed predominantly around ten locations near the outskirts of Amestris. These locations have, as part of their preparation for the circle's activation, been the sites of extreme bloodshed in the form of civil wars, rebellions-turned-massacres and grisly border struggles orchestrated by Father and his Homunculus agents as part of a ritual they call the Crest of Blood (血の紋, Chi no Mon) - in which the lifeblood and sorrow of the people is soaked into the land, making it ripe for the harvesting of souls for the Philosopher's Stone. As a result of their inhuman interference, these ten points of intersection (Riviere, Cameron, Fiske, Wellesley, South City, Ishval, Fotset, Pendleton, Reole, and Briggs) will serve as activation points while all humans within the circle become materials for the transmutation.
Nearly four hundred years in the past, after leaving the dead ruins of Xerxes, Father ventured westward and taught his brand of alchemy to the settlers who would go on to call themselves the nation of Amestris. This fledgling country, presumably under Father's guidance, attacked and conquered the city-state of Riviere soon afterward without first declaring war. Since that incident, the country of Amestris would continue to grow as Father slipped into the shadows to control the nation's expansion from behind the scenes.
Through an almost constant series of military annexations, Amestris would grow to a large enough size so as to properly house a Transmutation Circle of sufficient size for Father's goals, all the while carving the crest of blood into areas that corresponded to the intersection points of the circle as it was formed.
With his Homunculus agents Lust, Envy, and Gluttony (and initially Greed) acting as instigators to inspire violence and deepen the crests of blood, Sloth digging the tunnel by hand for nearly a century, Wrath posing as Amestris' Führer to ensure a continuation of the country's warlike legacy during the last phase of the plan and Pride acting as overseer of the other agents and watchman over the tunnel, Father's dastardly machinations move like clockwork toward his ultimate goal as the man himself waits patiently in his lair beneath Central City, at the very heart of the circle, for the moment of truth - The Promised Day.
When the Promised Day arrives and the Nationwide Transmutation Circle is activated, it becomes apparent that Father's array was significantly more complex than previously thought. In addition to the double pentagon pattern formed by the ten Crests of Blood, another transmutation circle is formed at the heart of Central City by way of the five Central Alchemical Laboratories and the circular underground tunnel connecting them, all arranged around Father at the center. (This shows that the Nationwide Transmutation Circle does, in fact, perfectly mirror the smaller circle in the Fifth Laboratory, both in design and function.)
The energy drawn when the Nationwide Human Transmutation begins to open the Gate of each Human Sacrifice, causing each one of them to conflict with one another, and the resulting clash releases enough Human Transmutation energy to open the Gate belonging to the Earth itself. As the massive Gate opens under Father's control, the Nationwide Transmutation Circle resonates with the Gate of the Heavens, which opens by way of the circle formed by the Sun's corona around the Moon during a passing solar eclipse. The planetary and celestial gates pull against each other and Father pulls the Gate of the Sky, which he calls God, into himself.
Although Dr. Tim Marcoh, the Crystal Alchemist, was among the first to realize that the Homunculi's plan was to create an extremely powerful Philosopher's Stone using the people of Amestris during the Ishval Civil War, it was Lt. Colonel Maes Hughes who first realized (at the cost of his own life) the true secret behind secrets. While investigating information that the Elric brothers had shared with him after the Laboratory 5 incident, Hughes discovered by cross-referencing the pattern Ed saw against records of the country's bloodiest historical incidents that the very nation of Amestris had been built from scratch specifically for the purpose of constructing and activating the Nationwide Transmutation Circle. Ed would go on to recognize a similar circle in the ruins of the ancient, but alchemically-advanced civilization of Xerxes and come to the same conclusion as Marcoh, but would not stumble upon the same findings as Hughes until discovering Sloth's nearly completed tunnel at Briggs.
Having extensively researched the differences and similarities between alchemy and alkahestry, Scar's brother had posited that Amestrian alchemists have been mysteriously blocked off from the energy of the earth utilized by alkahestrists by a layer of Philosopher's Stone energy between the crust and the surface. As a result of his investigations into two crafts and the conspiracy written in the blood of Amestrian citizens, he devised a reverse of the Nationwide Transmutation Circle using alkahestric principles.
Designed to overlap and work on top of the existing array, the design suggests that its purpose is to draw energy out from the center to five specific points on the border of the circle, as opposed to the original circle's purpose of drawing in energy from the exterior to the interior. The new, reverse array uses the power of the original circle to both neutralize the Philosopher's Stone energy concentrated underground and draw out the limitless power flowing deep within the earth for alchemical use. Unfortunately, he died in the Ishval Civil War before he could make his research a reality.
Years later, Alphonse Elric, Tim Marcoh, the Xingese alkahestrist May Chang and Scar - whose right arm is marked with symbols combining Alchemy and Alkahestry - discover and decipher the notes written by Scar's brother. As the battles for the Promised Day drag on, it appears that Scar has enlisted the help of fellow Ishvalan refugees to lay sheets adorned with portions of the Alkahestric reverse array at multiple specific points around Central City and possibly the nation as a whole, in an attempt to activate the reverse circle as a countermeasure. The circle is completed and activated in Chapter 105 by Scar, whose efforts neutralize the layer of Philosopher's Stone energy, countermanding Father's ability to seal off access to alchemical power, and augmenting the power of the Five Sacrifices' alchemical transmutations.
Apparently, a third circle had been put into place by Van Hohenheim, who had predicted the course of action that Father would take. Mapping out the path that the shadow of the moon would take across the Earth as the eclipse passed, Hohenheim visited five locations around the circle created by the lunar umbra, which corresponded to the five-point circle used in the creation of the Philosopher's Stone, and deposited several souls from his body into the earth at each location. Having kept their individuality as a part of Hohenheim's efforts, these souls activated a transmutation with the eclipse umbra as the circle and willfully used their power to strip Father of the roughly fifty million Amestrian souls the Homunculus had trapped within his body. Still linked to their bodies by the "spirit", these human souls were all drawn back to their bodies in a matter of seconds.
Over four centuries earlier, the being that would go on to be called Father orchestrated a similar event in the prosperous country of Xerxes, albeit on a slightly smaller scale. As an alchemically created Homunculus, the creature was the King of Xerxes' primary consul on the subject of alchemy-based immortality. With its knowledge of the Gate, the Homunculus persuaded the desperate king to construct a Nationwide Transmutation Circle that would encompass all of Xerxes and use all the people's souls to lengthen the lives of the royal court.
A large trench was dug according to the Homunculus' specifications, while the citizens were given the impression that the king had ordered the construction of irrigation canals. Beginning with the northern town of Bonath, several towns around the circle were destroyed - the homes burned down and the people and livestock slaughtered - carving a crest of blood into the land.
However, when it came time to activate the circle, it became immediately apparent that the Homunculus had deceived the court. Cleverly stealing the lives of Xerxes' citizens and royalty for himself and his caretaker Van Hohenheim, the Homunculus was able to fashion a pair of immortal bodies, each housing half of the nation's souls as power. Almost the entire country was killed off, leaving only the two immortals as survivors. Hohenheim wandered toward the land of Xing while the Homunculus ventured to the west to form the next phase of his plan.
When Edward encounters remnants of the Xerxes ruins, he recognizes that the runic circle that had been on the King's wall near the center of the array contains many runes that have more serious implications than just the creation of the Philosopher's Stone. The inclusion of the Hermaphroditic symbol, the ancient word for "God" (יהוה) written upside down and the lion devouring the sun imply that whoever designed the array was attempting not only to create a Stone, but also to pull God down from the heavens and devour it, thereby becoming a perfect lifeform. This is in direct keeping with Father's stated goals and the end result of the Nationwide Transmutation Circle's activation.