Sasuke became obsessed with power and left the village to join Orochimaru (snake dude)
Naruto left with Jiraiya to train
3 years later Akatsuki appears and wants to capture all of the Tailed Beasts (the demons inside of Naruto and Gaara + 7 others)
Itachi (Sasuke's brother who killed their whole family) is a member of the organization but is actually a good guy who has been trying to protect Sasuke the whole time. Itachi was ordered by the village elders to kill the Uchiha clan because they were plotting a hostile takeover
A goofy guy with a mask (Tobi) is the actual leader of Akatsuki, and not the spiky haired guy with the circular eyes that we see giving orders
The spiky haired guy with circular eyes is actually Nagato, a member of Naruto's clan (which was scattered across the world years ago) who grew up in a wartorn nation and was trained briefly by Jiraiya. His weird circular eyes supposedly belonged to the first ninja and the god of all shinobi. Nagato lost his childhood friend in battle and wants to take over the world with hostility and fear in order to create a false world peace.
Jiraiya finds Nagato and is shocked to find out that he was his student. Nagato kills Jiraiya
Tobi has a Sharingan and claims to be Uchiha Madara, one of the most powerful ninja ever and one of the founders of Konoha (also rivals with the First Hokage)
Akatsuki mostly dies for various reasons. Itachi dies in battle with Sasuke and Tobi tells Sasuke the truth about him being ordered to kill the clan. Sasuke catches feelings and wants revenge on the Leaf Village for having the elders make Itachi kill his family
Nagato attacks Konoha but Naruto beats him after some crazy training. Konoha is completely destroyed. Naruto persuades Nagato to give up his quest for world domination by reading him a passage from one of Jiraya's books (remember, Jiraiya was their master). Nagato uses his godly eye powers to bring back everyone who died in the Konoha attack, but he dies in exchange.
Tobi orders Sasuke to attack a meeting between the five Kages. At the meeting, Sasuke goes bat**** insane with evil because of his lust for vengance on Konoha. Tobi reveals his plan to merge all nine tailed beasts into an ancient evil, take over its power, and cast an illusion on the entire world. Kind of like Instrumentality in Evangelion, but...faker. It's a mass illusion where everyone gets to live out their fantasy.
The five ninja nations refuse to give away the remaining two Tailed Beasts (Naruto and this guy called Killer Bee) and an entire war is started. Tobi and his army of plant monsters allies with Kabtuo (who uses Orochimaru's Edo Tensei technique to revive a whole bunch of dead characters, and one mysterious guy)
War happens. Naruto trains with Killer Bee to master the fox. He kind of does, but not completely. He and Killer Bee were not supposed to fight in the war for their own protection, but Naruto escapes and with his new powers gives EVERYONE the hands.
More war and battles. Kabuto is losing his zombies left and right, partly due to Naruto. He decides to revive the mysterious guy. IT'S UCHIHA MADARA, the dude who the masked guy Tobi was supposed to be. So who is Tobi???
Uchiha Madara casually kills like thousands of people. It's also revealed that he has the godly circular eyes that Nagato had. He is the original wielder of those eyes (besides the first shinobi). It's because the Uchiha Clan and Naruto's clan (and a few others) are all descended from that guy.
Uchiha Madara continues to give EVERYONE the hands. Hands rated E for everyone. He's also unkillable because he's a zombie. So the five Kages join forces and try to seal him away.
Itachi (who was revived as a zombie by Kabuto but broke free from his control) and Sasuke team up to fight Kabuto and make him release the Edo Tensei jutsu, removing all the zombies from the war. They beat him, and Itachi has a heartfelt goodbye with his brother before he returns to being dead.
Meanwhile, Madara is just continuing to give out free samples of da hands like nothing. Then, when Kabuto's zombie jutsu is cancelled, Madara seems to be fading away. But wait! THIS ***** KNOWS HOW TO UNDO THE ZOMBIE JUTSU AND LITERALLY BRINGS HIMSELF BACK TO LIFE. Now there's an unkillable zombie hanging around and there's no way to banish him back to the afterlife. He continues to give hands. He cuts this basic irrelevant chick named Tsunade in half like wet toilet paper.
Meanwhile Naruto, Killer Bee, Kakashi, and Gai confront Tobi. Tobi is revealed to be Uchiha Obito, Kakashi's childhood friend who gave him his Sharingan and was presumed dead. It turns out he survived, was nursed back to health by Madara (who was a really really old man), and Madara engineered a scenario in which Obito sees the girl he loves killed. So Madara manipulated this kid Obito into thinking that the only way the world can be set right is to cast this mass illusion on everyone. Madara reveals that he awakened the eyes of the first ninja and gave them away to a little kid named Nagato. Madara then removes his life support (long story) and dies of old age, but not before telling Obito to pretend to be Madara, collect the nine beasts, find Nagato, and then manipulate Nagato to use his powers to bring the real Madara back to life. Madara will then absorb the evil super-beast's power and cast the mass illusion
Obito decided **** that and chose to do it all himself. That's why Madara finds himself revived by Kabuto's "bring you back as an immortal zombie" jutsu instead of Nagato's "actually bring you back as a human" jutsu. Obito never intended on bringing Madara back, but he's back. And he's STILL giving out the hands.
LONG STORY SHORT (I'm talking like 100 chapters) Obito takes in the power of the evil super-beast, loses it once Naruto mind rapes him, and decides to switch sides. Madara (who is a zombie still and not actually alive) uses his powers to manipulate Obito into reviving him (Obito had taken one of the godly eyes), takes the power of the super evil-beast, becomes even MORE godly, and tries to kill everyone. Naruto and Sasuke (who decided to join the good side) are actually *practically* killed in battle against Madara.
The god of all ninja, the first ninja, appears to Naruto and Sasuke simultaneously in a dream-like world, and reveals to them that they are each the inheritors of half of his power through a cycle of reincarnation that I won't get into. So he brings them back to life with new powers (Naruto gets the powers of all nine of the tailed beasts, and Sasuke gets the godly eye. It's not a random power up, and makes sense based on clues in the story), and the fight Madara. Madara gives them the okey doke and he manages to cast the almighty illusion. Only Naruto, Sasuke, Kakashi, Sakura, and Obito manage to not get caught in the illusion.
Now, Madara loses control. The super evil beast inside of him takes over his body and transforms into its true form--the form of a princess hailed as a goddess years ago, and the mother of the god of shinobi dude. She was the first person to awaken chakra, and she became greedy about it and eventually mutated into an evil demon beast until her son(s) sealed her away. Now she's back to full power, and it's revealed that the mass illusion is only temporary, she intends to absorb the life force of everyone caught in he illusion, killing them and turning them into mindless husks.
Long story short, Obito dies, Naruto, Sasuke, Kakashi, and Sakura defeat the goddess and seal her back up. She spits back out Madara and Madara dies before having a few last words.
The only thing left is to undo the illusion, but before that Sasuke decides he wants to kill the 9 tailed beasts and the 5 kages. He feels that they are the reason the world is in so much strife, and he wants to use his ultimate power to take over and lead the world to peace. Obviously, Naruto isn't having it and they fight (the most destructive battle in the series). The both clash with the last of their chakra and blow each other's arms off. All they can do is lay next to each other and wait to die as they bleed out. They talk about how they were both lonely *** kids with no families and Sasuke admits that Naruto (and Team 7) were really his only friends. They reconcile their friendship in one of the most heartwarming scenes ever
They get patched up, undo the mass illusion. Kakashi becomes Hokage. Sasuke feels bad for being psychotically evil. He leaves the village in order to figure out where Kaguya (the goddess) came from. He hints that he wants to smash Sakura's walls when he comes back.
10 years later. Naruto and Hinata have kids. Sasuke and Sakura have a daughter (OR DO THEY). Other characters are married and have kids. Naruto is hokage. Naruto's son, Boruto, is just as much a brat as Naruto was. Happy ending.
Now you can read the gaiden (that surprisingly didn't take long to type)