Naruto is a mischievous young boy who, due to the "stigma" of having the Nine-Tailed Demon Fox sealed within him, is shunned by the adults of Village Hidden in the Leaves, since he is the "vessel" of the demon who had killed so many people in the village twelve years ago. Before he was aware of this fact, Naruto was simply a young orphan, living alone in his house, eating his "cup ramen" (instant cup noodles), and basically getting attention to himself by being a brat. He would pull pranks, and vandalize monuments and statues. He even made fun of his ninja apprenticeship classes, inventing "stupid ninja skills" as "Sexy no Jutsu", where instead of transforming his appearance to look like his teacher, he turns in to a naked, blonde girl!
\Naruto is not without "serious ninja skills", however. His specialty is the "Kage Bunhsin no Jutsu", learned from a forbidden secret scroll he was tricked into stealing. In contrast to the normal "Bunshin" (clone illusions) done by ordinary ninjas, the "Kage Bunshin no Jutsu" produces multiple "Shadow Clones" of the user, with actual physical bodies. In short, Naruto can create real duplicates of himself (or anything else) and each of the duplicates can physically affect his enemies just like the real thing!
Naruto believes that the only way the people of the village will accept him and acknowledge him as a citizen of the village is to train hard and become the village's next "Hokage" (the highest-level ninja and leader of all ninjas in the village). This is ultimate goal, and he is determined to achieve it no matter what.
Naruto may be a hyperactive knucklehead, but few people have as much sheer guts and willpower, and it can produce a number of surprising results, such as when he first invoked the Shadow Clone technique. Having the much-talked-about Sasuke as a teammate also fuels his fire, since it stirs intense rivalry in both of them, spurring each to push harder.
He doesn't really know it (Kakashi does, though), but Naruto has even more chakra potential than Sasuke. The reason is that the spirit of that infamous nine-tailed fox is still within him, and the dark side of that secret emerges when Naruto is pushed over the mental edge. As he realizes just how big of a problem the demon within him can be, he gains another reason to become stronger: so he can keep the vengeful demon in check.
Naruto technically found out about the nine-tailed fox within him in the first episode when his original sensei was fighting the white haired ninja guy, Mizuki, over the scroll that Naruto "stole" so that he could graduate and be a higher level ninja. Mizuki is screaming at Naruto telling him that everyone hates him and it's a secret why, and that he'll tell Naruto. Naruto's sensei says no, but the Mizuki tells Naruto about the nine-tailed fox anyway. However, it would seem that Naruto either doesn't believe him or there was too much going on for Naruto to comprehend what was being said (or Naruto is just extra thick), because afterwards Naruto acts just as if he had never heard it.
Naruto learns from his new sensei, Jiraiya (who we later learn is Naruto's godfather), how to do a summoning jutsu. He learns how to summon Gamma Bunta and his son which is usually carried around like Akamaru on Kiba.
In the Manga Chapter after the two and a half year time gap, Naruto will still be a Genin while everybody else are Chunins and Jounins, because Naruto was training with Jiraiya. But Naruto should be a Jounin, meaning he is at that level. The same goes for Sasuke, because he was training with Orochimaru, so he should be a Jounin too.
There was a rumor among the show's fans that the Fourth Hokage could be Naruto's father. Well, not only was this rumor confirmed in chapter 367 of the manga, but also the Fourth Hokage's true name was finally revealed: Minato Namikaze. Additionally, we learn that Naruto's mother was Kushina Uzumaki, and that she was a ninja of the Land Of the Whirlpool.
Editor's Note:
In Episode 56: Live or Die: Risk It All to Win It All!, the Third Hokage says that the fight between Kyuubi and the Fourth Hokage happened 13 years ago. Since the fight ended with Kyuubi being sealed inside the newborn baby Naruto, this statement would indicate that Naruto is 13 years old, even though the official Naruto databook gives Naruto's age as 12 years old at the start of the series. This may not necessarily be a contradiction, however, as time has obviously passed since the first episode. According to this Great Naruto Timeline, by the time Episode 56 rolls around, it has been almost a year since the first episode.
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