Hagoromo Ōtsutsuki

The was the legendary figure who founded the arts of ninjutsu and created the ninja world. He defeated the Ten-Tails and sealed it within his own body, thus becoming the first jinchūriki.

Background
According to Jiraiya, the Sage was a priest who appeared long ago in an age of endless war. He was the first to explain the truth about chakra, as he tried to use his power and wisdom to lead the world to peace instead of war. The Sage travelled throughout the world, spreading his ideas and religion, the, which eventually came to be known as ninjutsu. His great deeds and true desire to bring peace to the war-torn world made him widely known as the.

According to Madara Uchiha, centuries before the beginning of the main storyline, the Sage defeated the most powerful demon in the ninja world, the Ten-Tails, being praised as a god by virtue of his victory. In order to protect the world from the Ten-Tails, the Sage developed a technique to seal the beast within himself, allowing him to harness and control its terrifying power, and making himself the first jinchūriki. Although he had successfully sealed the Ten-Tails, its power was so great that the seal would break after the Sage's death.

Aware of this, the Sage used his ability known as to divide the Ten-Tails' chakra into nine parts, which would become known as the tailed beasts. He then used Chibaku Tensei to seal the Ten-Tails' body inside a gigantic stone prison in the sky, thus creating the moon. The Sage would leave behind a tablet for his descendants, detailing his own history with the Ten-Tails. Only those who possess the Rinnegan can fully decipher what is written on the tablet, while a reader with a lesser dōjutsu can still partially interpret the information.

The Sage's ultimate wish to establish peace throughout the world was a goal that could never be achieved within his lifetime alone. Knowing that his end was approaching, the Sage entrusted his strength, dream, and legacy to his two sons. The older son, who inherited the Sage's "eyes" (his powerful chakra and spiritual energy), believed that power was the true key to peace. The younger son, who inherited the Sage's "body" (his powerful will and physical energy), believed that love was the true key to peace. On his deathbed, the Sage chose his younger son to be his successor. Overcome by bitterness and envy, the older son attacked the younger, beginning a war between them. Their feud would continue on through their descendants: the Senju clan and the Uchiha clan.

The Rinnegan would later resurface, manifesting itself within Nagato, a descendant of the Uzumaki clan, who were in turn related by blood to the Senju. Jiraiya believed that the Sage could have somehow been "reborn" as Nagato in the present era. Nagato himself, however, admitted that his own power paled in comparison to that of the Sage. Still others, such as Kakashi Hatake, believed that the Sage is merely a myth, and that the Rinnegan is merely a mutation. However, the Nine-Tailed Demon Fox's recognition of the Sage (and the tailed beasts' apparent status as the only survivors from the Sage's lifetime), lends credibility to his existence.

Appearance
Although depicted only as a silhouette, several details can be inferred about the Sage's appearance. He had long, spiky hair flowing backwards, in a style similar to Madara Uchiha's. He wore what appeared to be a cloak with a high open collar or armour similar to that worn by Hashirama Senju, showing his necklace with six red magatama, similar to the black necklace of the same design worn by Nagato's Deva Path. He seemed to have had horns on his forehead; this could have been a forehead protector similar to the one worn by Jiraiya or, if the outline of Naruto Uzumaki's Nine-Tails Chakra Mode is an indication, it might have merely been part of his hairstyle.

Abilities
The Sage was revered as the man to first understand the very nature of chakra itself. This wisdom, combined with his kekkei genkai, the Rinnegan, allowed the Sage to create the first modern ninjutsu. With such powers at his disposal, the Sage obtained a great following, as men and women from across the world strove to learn from his teachings. As the Sage's disciples grew continuously greater in number, it led to the creation of ninja clans, and later, ninja villages. It is impossible to overestimate the Sage's effect on the course of the ninja world's development. As the first true ninja, he created the ninja world, revolutionized it, and left it forever changed.

The Sage was shown carrying two objects. One was what appeared to be a large katana in his hand, whilst the other was a shakujō, a Buddhist ringed staff which is meant to be used in prayer, but can also be effectively employed as a weapon.

Rinnegan
The Sage was said to have been the only shinobi to have fully mastered the Rinnegan, allowing him to manipulate all six types of nature chakra. He is revered as one of the most legendary figures in the Naruto universe, and is most likely the strongest ninja that ever existed. He was so powerful, that he created the moon using Chibaku Tensei on his deathbed. Even Nagato stated that his power paled in comparison to that of the Sage's.

Jinchūriki
The Sage developed the first jutsu capable of sealing a tailed beast inside a human body, making himself the very first jinchūriki in history. Having the Ten-Tails' great power contained within him, the Sage developed immeasurable power and chakra that far surpassed all of his peers. Even on his deathbed, the Sage was able to employ his Chibaku Tensei technique on a massive scale and use that chakra to create the moon and seal the body of the Ten-Tails within it, a clear testament to his incredible power.

Yin and Yang Chakra
By using the Yin chakra, that comes from the spiritual energy, and the Yang chakra, that comes from the physical energy, he could the ability Banbutsu Sōzō to create form from nothingness with a mere thought, and then bring it into life. The Sage created the nine tailed beasts from the Ten-Tails' chakra by using this ability.

Treasured Tools
The Sage wielded unique tools which became known as the Treasured Tools of the Sage of the Six Paths, each of which possess a unique and powerful ability, but all of which require a vast reservoir of chakra, which would quickly kill any normal human, in order to be used. Being the jinchūriki of the Ten-Tails, this posed no problem at all for the Sage. The five treasures are: the Bashōsen, Benihisago, Kōkinjō, Shichiseiken, and the Kohaku no Jōhei. By combining the Benihisago, Kōkinjō, and Shichiseiken, the Sage (or any user) can capture the word soul of his victims, and then draw them into the gourd and seal them away for good. The Bashōsen can generate any of the five basic elements. The five treasures eventually fell into the possession of Kumogakure, and then into the hands of the Gold and Silver Brothers, who made use of the treasures in their criminal activities. Kumo however, managed to retrieve the pot, which has the power to seal away anything.

Trivia

 * The necklace that the Sage wore might be a reference to the Yasakani Jewel; a legendary magatama necklace that is part of the Japanese Imperial Regalia, together with the Kusanagi Sword and the Yata Mirror. The Yasakani Jewel is the only one of these treasures yet to make an official appearance in the series.
 * The Sage shares the same nickname with the Third Hokage, Hiruzen Sarutobi. They were both known as the.
 * Due to the Gold and Silver Brothers' ability to assimilate the Nine-Tails' chakra by eating some of its flesh, the Fourth Raikage suspected them to be distantly related to the Sage.

Quotes

 * (As quoted by Jiraiya)