Infinite Tsukuyomi

The Infinite Tsukuyomi is a technique which is the key to the Eye of the Moon Plan.

Description
The user creates an empty dimension under their control, which can then be filled with the contents of their desire, using the power of the Ten-Tails to do so. While physically tethered and connected to the Demonic Statue of the Outer Path, Madara was able to cast a similar genjutsu, albeit on a smaller scale, using only a standard Sharingan. After doing so, Madara could manipulate the otherwise blank and white world to create anything he wanted, no matter how detailed.

To trap every living being in the world within this genjutsu, however, Kaguya's Rinne Sharingan must be reflected off of the moon's surface. In order to do this, with the exception of Kaguya who ate the Shinju's chakra fruit, one must first become the Ten-Tails' jinchūriki. The genjutsu can be cast using the eye that blooms at the top of the Ten-Tails' tree form or the third eye which opens on the jinchūriki's forehead.

Kaguya combined her powers of the Rinne Sharingan and Byakugan to enslave the populace. This technique can also be reflected off the moon, upon the technique's activation, the light from the moon's eye illuminates the entire planet, turning it bright as day and making it impossible to escape. All living things are bathed in its penetrating light and immediately placed under the genjutsu. This causes a reflection of the Rinnegan to appear in their eyes as they are rendered immobile, though their cognitive abilities remain unimpaired. The user can then use the God: Nativity of a World of Trees technique to ensnare the targets, assimilating their life force with that of the Shinju. Once this is done, the person is locked in a permanent genjutsu, in which they experience a dream world based on their individual desires, yet will live forever due to the tree's power, during which the victims are siphoned of their chakra. Once complete, those tethered to the Shinju will become drained of everything they once were and reduced to a shell of their former selves, ultimately becoming White Zetsu — ideal soldiers for Kaguya.

Countering
Despite the seemingly inescapable nature of this technique, the Infinite Tsukuyomi can be countered through specific means:
 * The user's Rinne Sharingan reflects off of the moon for a limited period of time after the technique has been activated. Those who avoid this light will not be trapped within the genjutsu. Using his Rinnegan, Sasuke Uchiha was able to shield himself and his team by covering them with his Susanoo until the light disappeared.
 * Hagoromo Ōtsutsuki stated that a person with the chakra of the nine tailed beasts and a Rinnegan user must form the rat hand seal together to cancel the technique. Sasuke later claimed he would be able to cancel the technique alone using the tailed beasts under his control. Upon the technique's cancellation, the roots used to bind the victims wither, as do all remaining White Zetsu.

Immunity
Certain individuals are unaffected by the Infinite Tsukuyomi, despite being exposed to its light:
 * Shinobi reincarnated via Summoning: Impure World Reincarnation are not affected by this technique.
 * Black Zetsu is unaffected by the technique, as is anyone he is attached to at the time — namely Obito Uchiha.
 * Those who lack a brain or sensory organs, like White Zetsu.

Known Dreams
After being trapped in this illusion, several characters' dreams were shown:
 * Hinata Hyūga: Being a couple with Naruto Uzumaki while Neji and Hanabi look on.
 * Kiba Inuzuka: Being Hokage and declaring a national holiday for dogs.
 * Shino Aburame: Discovering and taming a gigantic new insect species.
 * Chōji Akimichi: A girlfriend who loves him for his weight, providing a lot of food.
 * Shikamaru Nara: Seeing both his father and teacher with their significant others, while also declaring to Temari he won't even bother getting married.
 * Ino Yamanaka: Sasuke and Sai fighting over her love, while her father is proud of her success.
 * Rock Lee: Successfully defeating both Naruto and Neji and gaining the love of Sakura Haruno.
 * Tenten: Rock Lee and Might Guy acting maturely, while talking to Neji about it. In the anime, her friends and allies have polar-opposite personalities and she becomes a highly respected as a weapons master.
 * Mei Terumī: Getting married, with the other four Kage in attendance.
 * Tsunade: Dan Katō as Hokage, reunited with the other Sannin and Nawaki. In the anime, Konohagakure has a more stable history, where Jiraiya, Minato, and Kushina all survived. Also, the Uchiha Clan Downfall never happed as peace was made with them. Ultimately, the village prospered so much that Jiraiya wrote a story about it.
 * Gaara: A happy childhood with his entire family and Naruto as his close friend.
 * Yamato (anime only): Becoming the new official leader of Team 7 (including a reformed Sasuke) while being highly respected by his fellow shinobi.
 * Killer B (anime only): All jinchūriki have their respective tailed beasts acting as miniature familiars, rather than sealed within, and are kept confined to, if not locked up, in their villages. B frees the other jinchūriki with Yugito Nii and they team-up on a mission to protect a princess from Akatsuki.
 * Karin (anime only): Sasuke becomes the Hokage and finally smiles at Karin again. Also, Karin finally gets revenge on Zōsui.

Limited Tsukuyomi
In Road to Ninja: Naruto the Movie, Obito casts a trial version of the Infinite Tsukuyomi, the, on Naruto and Sakura, which provides the alternate reality setting of the movie. Instead of casting it off of the moon, he instead used a crystal ball to serve as a medium to cast and host the alternate world.

Trivia

 * can also be translated as "dreams", "fantasy", or "visions", which fits the nature of this technique.
 * In Road to Ninja: Naruto the Movie, when Obito uses the Limited Tsukuyomi and the reflected eye of the Ten-Tails appears, it has seven tomoe, representing the number of tailed beasts that Akatsuki had captured at that time.
 * Believing that this genjutsu was cast using a Rinnegan, Sasuke hypothesised that it could be cancelled by the Rinnegan. He was later proven to be partly correct.