Danzō Shimura

is a Konoha elder, one of the oldest villagers in Konoha. He is also in charge of the ANBU faction named The Foundation.

Background
In the past, he competed with Hiruzen Sarutobi for the position of Third Hokage. His desire for obtaining the said status was so great, that he even at one time secretly aligned himself with Hanzō of the Rain Village. He created the (now disbanded) ANBU faction named The Foundation and acted as its head. He is now disabled but still wields enormous political clout. However, it is known that during the Second Ninja world war he was still an active shinobi, although he had already lost an eye. Nagato states that Danzo had allied with Hanzō, in hopes of gaining his aid in becoming Hokage, which implies that Danzo's treachery began years before.

He even took part in the dealings with the Uchiha clan, when Konoha learned that they were planning a take over of the village. He planted Itachi Uchiha as a spy in his own clan, and it is assumed that he ordered the annihilation of the clan in order to avoid a civil war that would lead to the destruction of the village. When Itachi refused to kill Sasuke Uchiha as well, Itachi threatened to go public with the assassinations if Danzo ever harmed Sasuke.

Personality
Danzo is a blunt tactician, which is demonstrated by his preference of eliminating threats and ordering them executed instead of using negotiation. His ideology regarding shinobi is parallel to that of fascism. He is also willing to use anyone, even his enemies, to achieve his goals. The most prominent example of this is Akatsuki, whom he uses as a way to weaken Konoha so as to overthrow Tsunade.

Although not an official part in the affairs of Konoha, he still maintains an eye on everything. He will immediately act if he sees anything that might look like a threat to Konoha with or without the consent of the Hokage. His fellow elders, Homura Mitokado and Koharu Utatane, hold him in high regard and have often taken his advice when dealing with the politics of the village.

Even though he addresses Tsunade politely, he is not pleased with her. This is mainly because she is the granddaughter of Hashirama Senju, the First Hokage, and like Hiruzen, has inherited the same teachings and philosophy as him, something that Danzo opposes. He has a rather nihilistic view towards anybody he doesn't consider worthwhile or a potential problem.

Sai and Sasuke arc
Danzo assigns Sai to Team 7 as a replacement for Sasuke Uchiha. Because of this, Tsunade assigns Yamato to the team as well in order to keep an eye on Sai in case Danzo has other plans for him. During a mission Sai makes contact with Orochimaru on Danzo's behalf, proposing that the two join sides in order to destroy Konoha. Although believing this to be the evidence needed to prove Danzo works against the village, Yamato later discovers that that Sai's actions are a ruse to get close to and kill Sasuke. When Sai proves unsuccessful and displays attachment to Team 7, Danzo merely states that "emotion brings hatred, and hatred brings war."

Fire Temple arc
Danzo is later seen followed by ANBU agents, on Tsunade's orders, when he is to be briefed by Tatsuji, a spy of his, from Amegakure. He and Tatsuji are apprehended and questioned by Tsunade, though the interrogation is interrupted by Sora, who was found eavesdropping.

Pain's Invasion arc
When Pain begins his invasion of Konoha and Tsunade asks the toad Kousuke to retrieve Naruto Uzumaki, Danzo kills Kousuke to keep the Nine-Tailed Demon Fox "out of the way". Danzo is later seen with the members of The Foundation, instructing them not to help with the defense of Konoha in the hopes that Pain's actions will give him the opportunity to overthrow Tsunade. With that action in mind, Danzo plans on becoming Hokage.

Trivia

 * Some fans speculate that Danzo is currently unable to do jutsu due to having one arm. It may be possible that he can still form hand seals with only one hand, similar to Haku.
 * Danzo may have been named after the ninja master Kato Danzo.