It is an unusual dome-shaped building that also an institute for the study of PSI phenomenon.
It first appeared in Abra and the Psychic Showdown. Ash, Sonic and his friends found their way to the Gym after getting trapped by Team Rocket and Dr. Eggman. Ash challenged Sabrina to a battle, to which she offered an unusual request; if he lost, he and his friends would have to play with her.
Sure enough, Ash lost and was forced to play with Sabrina. She shrunk him and the others down to the size of dolls and nearly knocked them over with a ball. They were saved by Sabrina's father, who told Ash that if he really wanted to defeat Sabrina, he would have to get a Ghost-type Pokémon from Lavender Town.
Ash took his advice and returned two episodes later in Haunter versus Kadabra with a Haunter he picked up. However, when he went to challenge Sabrina, it was nowhere to be found. Ash, Sonic, Tom, and Chris was about to be turned into dolls, like Misty and the others, when Sabrina's father appeared once again to save him.
Once more, Ash went to challenge Sabrina with his Haunter. It disappeared again, but reappeared halfway through the battle with Kadabra and Pikachu. After making Sabrina laugh, all of her spells were broken, and Ash received his fourth Badge.