A Bus Controller is a crucial component in computer systems that manages data transfer between the central processing unit (CPU) and other hardware components, such as memory and input/output devices. It ensures that data is sent and received in an organized manner, preventing conflicts and ensuring efficient communication within the system. The Bus Controller operates by coordinating the activities of various buses, which are pathways for data. It can handle multiple types of buses, including data buses, address buses, and control buses, allowing for smooth operation of the entire system. This functionality is essential for maintaining system performance and reliability.