Third Shinobi World War

The  is the third of the four shinobi wars that involved the majority of the shinobi villages. It takes place more than ten years prior to the beginning of the series and has been rarely shown in the series outside the Kakashi Gaiden. Because of a decline in national power, the reign of the Five Great Countries was crumbling. Along their borders, skirmishes with smaller nations broke out all the time. The prolonged war gradually spread its fires far and wide, until at last it developed into the Third Shinobi World War. This war turned into an unprecedented war of attrition, tormenting all nations with a shortage of war potential. Not even excluding a great power like Konoha, very young children were thrown unto the battlefield, losing their short lives.

War
Konohagakure and Iwagakure fought across Kusagakure after the latter had infiltrated it in order to lay siege to the border of the Land of Fire. It was not until the destruction of the Kannabi Bridge that the war began turning in Konoha's favour. Sunagakure also participated in the war. Kumogakure was also seemingly a part of this war, with at least Konohagakure clashing with shinobi from this village. These two villages finally made peace after the Hyūga Affair. Kirigakure also partook in the war against Konohagakure and made Rin into the jinchūriki of the Three-Tails. Rin then chose to die by Kakashi's hands, rather than being used as a tool to destroy her own village. The shinobi were adamant in retrieving Rin's body and not allowing it to fall into enemy hands at all costs. They were however stopped by a grief-fuelled Obito. Some time after this, Madara Uchiha would pass away, but not before passing his plans onto Obito to fulfil until the time of his resurrection. In the anime, both Third Tsuchikage and Third Hokage had grown weary of sacrificing more lives to the war and finalized a peace treaty over the objection of war hawks in their respective villages. Furthermore, Hiruzen decided to step down as Hokage while letting Minato rule in his steed instead of listening the Danzō and promoting Orochimaru.

Effects
Minato Namikaze became a hero during the war and gained fame as and was promoted to the rank of Kage at the end of the war. Kakashi Hatake, who was promoted to jōnin and gained his Sharingan from Obito Uchiha during the mission to destroy the Kannabi Bridge, also gained fame as. Itachi Uchiha was traumatised by the violence of the war and grew to seek peace at any cost because of it; The rest of his life would be greatly affected by this experience. Sasori earned fame as, due to his ingenious puppets dying the sand red with his enemies' blood. The Battle of Kikyō Pass, where Kabuto Yakushi was said to have been found orphaned (although this was later revealed to be a cover), took place in this war.

In Amegakure, Yahiko, Nagato, Konan, and many other shinobi formed a group that eventually fought the rule of Hanzō. Initially, they were merely preaching peace for Amegakure. They were supported and even invited to negotiate peace by Hanzō himself. In the anime, they unknowingly disrupted Danzō's attempt to disrupt a ceasefire between Konohagakure and Iwagakure. After Danzō used his men's corpses to frame Akatsuki of murdering his village's shinobi, Hanzō came to fear that they were power hungry and would usurp his power. He betrayed them and called in the assistance of Danzō and his Root ANBU while holding Konan hostage. The confrontation between the two sides lead to a slaughter of all Amegakure and Root shinobi present by Nagato, with the exception of Hanzō who fled, and to the death of Yahiko. This incident failed to suppress the group and led to a civil war. The civil war split Amegakure and ultimately resulted in the complete and utter annihilation of Hanzō's faction.

Trivia

 * It was claimed in Naruto Shippūden 3: Inheritors of the Will of Fire that during this war, the missing-nin Hiruko was actively working to finish his Chimera Technique and have tracked Kakashi in order to brand him with his Puppet Curse. He claimed that, eventually, the Third Hokage ordered his assassination to be carried out by his former friends, the Sannin.
 * It was claimed in Naruto Shippūden 4: The Lost Tower that Rōran was destroyed during this war.
 * In the Tsuchigumo Kinjutsu Arc, Hiruzen Sarutobi made a peace treaty with the Tsuchigumo clan sometime during the war.