All versions of this emulator emulated the 68040 chip instruction set. Early versions emulated it in a simple fashion where each instruction was carried out by a series of equivalent PowerPC instructions. Later, a dynamic recompilation emulator was used, to boost performance. This worked by "recompiling" common sections of 680x0 code into faster sequences that were locally cached. The emulator could recognise the same sequence of 680x0 code, and run the previously cached code to avoid doing the translation again. This emulator was capable of emulating the 68040 faster than any real 68040 was capable of running.
One reason that this emulation was so successful is that many of the APIs for the Mac OS were originally implemented as traps on the 680x0 processor - calling an API actually was recognised by the 680x0 as an error condition, which would cause it to handle that error through one of its hardware vectors, which in turn would look up and run the operating system routine from ROM or RAM. In the emulator, such traps could be replaced by native Power PC code, so the only code being emulated was the application itself - any system API it called could be accelerated with native Power PC code. It also allowed Apple time to port the OS to the Power PC - at first only time critical aspects were rewritten in native code, leaving much of the OS emulated. Gradually most of the OS was rewritten to be native, so the OS got faster over time.
For the programmer, the transition to the Power PC was made fairly painless, as the emulator was started and stopped automatically. This was achieved using a new type of pointer called a Universal Procedure Pointer (UPP). For 680x0 code, a UPP was an ordinary pointer, so already compiled code did not need to be changed to run. For Power PC code, the pointer was actually a special trap, which would examine the flags associated with the pointer to determine the instruction set architecture (ISA) of both the caller and called code, and start up or stop the emulator as needed. This trap also dealt with details such as presenting passed parameters in the right order for the ISA in question. The compilers for Mac OS created such UPPs automatically when the proper macros were used, so dealing with the dual architecture required very little work for the programmer.
The emulator is no longer part of Mac OS X, though it remains as an integral part of the Classic environment.