Valley of the End

is just on the border of the Land of Fire and the Land of Sound.

The story behind the Valley was that the two founders of Konoha, Hashirama Senju(the First Hokage and Head of the Senju Clan) and Madara Uchiha(The Head of the Uchiha Clan) had a battle there as a result of Madara feeling betrayed and wanting revenge against Hashirama. It is also there that the Nine-Tailed Demon Fox makes its first known appearance, under the controll of Madara. As explained by Sasuke, the battle was so great, that the two tore the earth itself apart and created the valley.

Hashirama managed to defeat Madara, and in memory of their duel, two giant statues were built on opposite sides of the waterfall. Madara on the left and Hashirama on the right(see picture on the right)

Sasuke Uchiha vs. Naruto Uzumaki
Many years later, a descendant of Madara, and the son of the Fourth Hokage fought, Sasuke Uchiha and Naruto Uzumaki respectively. As with the fight between the First and Madara, Sasuke, aided by Orochimaru's Sound Four, made his way to the Valley of the End with Naruto in pursuit. As the two fought, both awakened great yet dangerous powers; Naruto slipped into his one-tailed transformation, and Sasuke activated the second level of his Cursed Seal of Heaven. In the end, the two attacked each other with enhanced versions of their signature techniques, a Nine-Tailed Demon Fox-powered Rasengan, and the Flapping Chidori, and in the end, Sasuke emerged victorious and continued to Orochimaru.

Ironically, before the battle started, Sasuke stood atop Madara's head, while Naruto stood atop the First's, symbolizing the similarities between the two and their respective predecessors. Both Madara and Sasuke betrayed Konoha, while Naruto and the First Hokage, affiliated to Konoha, attempted to stop the formers.

However, unlike the original battle in which the First Hokage successfully defeated Madara, Sasuke emerged victorious from his battle with Naruto.

The Return of Madara Uchiha
Three years later, after the death of Deidara, Madara Uchiha, in the guise of Tobi, returned to the valley and sat upon the head of his statue. While there, he mused on the growth of Sasuke's power, and his destiny.