Hashirama Senju

, the, was the founder of Konoha, the older brother of Tobirama Senju (the Second Hokage), and the grandfather of Tsunade (the Fifth Hokage) and Nawaki.

Background
Hashirama was originally the leader of the Senju clan. During the first wars, he and the Senju clan rose to being regarded as one of the two most powerful clans in the world, rivalling the Uchiha clan. Because of this, the Senju constantly fought the Uchiha clan, and he himself against Madara Uchiha personally, even to the point that, when someone hired the Senju clan, the opposing side would hire the Uchiha clan, and vice-versa. Eventually growing tired of the constant fighting, Hashirama and his clan approached the Uchiha and offered a truce with them. Allied with Madara and his clan, the two groups started what grew into the Five Great Shinobi Nations by founding Konohagakure.

When deciding who should become the leader of Konoha, the villagers selected Hashirama over Madara for the title of First Hokage. Fearing that Hashirama would oppress the Uchiha, Madara left the village, and challenged Hashirama's rule. In the aftermath of their battle, Madara was believed to have been killed, and the Valley of the End was created. To commemorate the battle, two statues, of Madara and Hashirama, were carved into the earth surrounding the valley.

At some point, Hashirama gained control of several tailed beasts, which he would later spread out between the warring nations as peace offerings, and to help equalize the powers between the nations. While he was Hokage, Hashirama defeated Kakuzu, who received orders from Takigakure to kill him. However, the war still waged on, and, thinking about the future of Konoha, he and his younger brother, Tobirama Senju, the future Second Hokage, trained the young Hiruzen Sarutobi, the future Third Hokage. Not long after founding Konoha, Hashirama died in battle, passing on the title of Hokage to Tobirama.

Personality
Hashirama was shown to be a very calm and collected person, as well as kind and caring, with a deep sense of loyalty. He saw the people of Konoha as a part of his own family, and his legacy took a firm root in the village. He was also shown to be a very wise and insightful man, as he passed on great teachings to Hiruzen. It was he who first believed that all Leaf ninja should show a true loyalty to each other, and that a Kage must be willing to put his life on the line for his village to set an example for all others.

Invasion of Konoha arc
Both he and Tobirama were revived from the dead by Orochimaru using Impure World Resurrection to fight Hiruzen during the invasion. While fully aware of what was going on, and saddened that he would have to fight his former student, Orochimaru employed a special seal to rob Hashirama of his free will. During the battle, he demonstrated great teamwork and combination attacks with his brother, forcing Hiruzen to summon Enma for assistance. He also demonstrated his great Wood Release abilities, and at the same time showed great taijutsu skills. His soul was eventually sealed by Hiruzen with the Dead Demon Consuming Seal, along with his brother and Orochimaru's arms. Before his soul was completely removed, he and his brother apologized to their former student for the trouble they had caused.

Sasuke & Sai arc
Although he doesn't make an actual appearance in Part II (though he is seen through flashbacks), Orochimaru was revealed to have experimented with Hashirama's DNA in the past. Desiring Hashirama's unique abilities, Orochimaru exhumed the Hokage's body and infused sixty infant test subjects with his DNA, hoping that one would prove able to use Wood Release. Only Yamato survived the process.

Abilities
Hashirama had been noted by both Madara Uchiha and several Konoha Jonin to be regarded as the most powerful ninja of his time. He was greatly respected by every shinobi during his life, such that Madara claimed there was nobody he admired more. He knew how to perform a great number of jutsu, and was otherwise knowledgeable of those he could not, as indicated by his ability to recognize the Summoning: Impure World Resurrection that was used on him.

Wood Release
He was most famous for his Wood Release jutsu, a Kekkei Genkai to mix earth- and water-natured chakra to create this new element. By converting chakra into the source of life, he was able to create trees, cause them to grow to great sizes, and manipulate them to diverse shapes and battle uses at will. It was said this ability was used to create the very landscape and foundation that Konoha is built on. This ability was apparently unique to him, since none of his relatives have been shown using the ability. Even Yamato, the only person to have proved compatible with Hashirama's genes, found his use of Wood Release to be much weaker in raw power. Yamato has also shown great skill in standard water and earth techniques, so it is presumed Hashirama could do water and earth techniques as well.

The ability Orochimaru most highly praised him for was his unique ability to control tailed beasts. Of all his considerable talents, it was this ability in particular that made Hashirama unparalleled in the shinobi world. At one time, he had many of the beasts in his possession, and was able to defeat the Nine-Tailed Demon Fox during his battle with Madara. This ability was greatly amplified by his crystal necklace, which Yamato suggested was a requirement to control even Naruto's partial lapses into tailed forms.

Trivia

 * The Necklace, worn by Tsunade and later worn by Naruto, originally belonged to Hashirama.
 * His face on the Hokage Monument has a gash across the bridge of the nose, similar to Iruka Umino's scar. He didn't seem to have any scar or marking while he was alive, however.
 * In the English dub version of the anime, his Mokuton technique was called Secret Earth Jutsu rather than Wood Style.
 * Many fans believe he may be the strongest character revealed so far in the Naruto series (aside from the Sage of Six Paths), mainly because he not only single-handedly defeated Uchiha Madara, but the kyubi under Madara's control as well. This is to say that the even the 4th couldn't defeat the kyubi alone without having to sacrifice himself in the process, let alone defeat the strongest Uchiha ever.

Quotes

 * "The fellow countrymen of the leaf make up each part of my body ... those of the village believe in me, and I believe in them. That's what it means to be Hokage!"
 * "Whenever you live, there will always be war."
 * "Those who stray from the path of justice have no courage, but under the wing of a strong leader, cowardice cannot survive."