Madara was born and raised in a world when it was endless war between the Uchiha and the Senju. Ninja clans were far too numerous and there was constant war. He and his younger brother, Izuna, were equals in every way and they constantly competed to prove which was better. It was through their competitions that they gained the Sharingan, and later awakened the Mangekyō Sharingan; the first ones in the history of the clan to do so. They used their power to take control and unite the clan, with the elder brother, Madara, becoming the leader. Together they became both famous and feared as they were referred to as the strongest clans, their rivals were the Senju.
As Madara was the first to discover the Mangekyō Sharingan, he was also the first to discover its downside and went blind as a result. He became depressed and desperate, using many different techniques trying to regain his vision but nothing worked. Izuna agreed to give him his eyes so that Madara could take care of the clan, and Madara asked for forgiveness when he took his brother's eyes to replace his own. By doing this he attained the Eternal Mangekyō Sharingan, a fusion of the two brothers' that would never lose sight, and he gained a new Mangekyō Sharingan technique. Izuna unfortunately would die in battle some time later. Tired of the constant fighting, the Senju proposed a truce. Madara was wary of this because of their shared animosity and tried to convince the Uchiha that it would end in disaster, but no one else saw it that way and he reluctantly allied with the Senju.
He and the leader of the Senju clan, Hashirama, together made a deal with the Fire country and formed Konoha by uniting many clans, other countries quickly followed the one village/one country design that there was finally some stability and peace. But when the time came to choose a leader of the village, everyone rallied behind Hashirama, which made Madara angry and paranoid. He believed that the Uchiha had the right to rule and would become dogs of the Senju under Hashirama's rule, but his clan deserted him thinking that he was he was just greedy and power-hungry. He abandoned the village, but later returned with the Kyūbi (Kurama) under his control to get revenge. Madara ultimately died, but their battle was so great that it shaped what is now known as the "Valley of the End," and there are statues of Madara and Hashirama engraved on the sides of its waterfall.
An ally of Madara continued Madara's ambitions using his name, but the real Madara would be brought back by Kabuto using the Impure World Reincarnation technique to fight in the 4th great ninja war, to the shock of everyone. Together with Mū who was being controlled by Kabuto, they faced down a branch of the alliance headed by Gaara and Ōnoki, with the help of one of Naruto's Shadow Clones. Madara evaded Gaara's attack and used Great Fire Annihilation against the alliance, multiple Suiton (Water Style) users tried to stop the attack only for Madara to emerge from the smoke and violently cut down his enemies. Ōnoki attempted to raise the ground to push Madara into Naruto's Chō Ōdama Rasengan, but Madara countered with Susanoo. Naruto then used Sage Mode while Madara was distracted by the army, Gaara then used his sand to grab Madara by his feet and pull him out of Susanoo so that Naruto could hit him with the Rasenshuriken. It seemed to work, but Madara absorbed it using the Rinnegan; he attained it shortly before his death after taking some of Hashirama's DNA during their battle. Wanting to test his power, Madara then caused an asteroid to fall from the sky.
Ōnoki attempted to stop it, only for Madara to surprise everyone with a second asteroid which injured Ōnoki and wiped out most of the division. Madara tried to summon the Kyūbi, but Kabuto revealed that it's currently sealed inside of Naruto. Madara then created a vast number of trees using Hashirama's Mokuton (Wood Style) to attack the survivors, but Naruto managed to defend against the attack. Madara and Kabuto were about to attack, but were stopped by the sudden appearance of Tsunade and Ay who were teleported to the battlefield along with Mei. It was now Madara and Kabuto vs. the Five Kages. Tsunade began healing Gaara and Ōnoki while Ay and Mei attacked to buy her time, and other alliance ninjas attacked Kabuto. Madara dodged Mei's lava but was struck by Ay's punch and Mei attempted to bury Madara in lava but he defended with Susanoo. Madara tried to attack, but Gaara and Ōnoki blocked the attack together, and then Ōnoki piggybacked on Ay and used his Light-Weight Rock to make Ay faster, Kabuto tried to intercept but was sway aside and then Ōnoki used Added-Weight Rock to make Ay punch harder to send Madara and his Susanoo flying. Madara used Hashirama's power again, this time to grow immense flowering trees that produced a paralyzing pollen. Gaara tried to lift everyone out of it, but Madara used Susanoo to swat them down back and set the forest on fire around them, Ōnoki used his Jinton (Particle Style) to destroy the trees and get rid of the fire. The Kages then attack again with Tsunade delivering a fatal blow to Madara, but it turns out to be a Wood Clone that Madara set up in the confusion and stabbed Tsunade, being near-immortal she broke off Susanoo's sword and tried to stab Madara with it, but to no avail. Madara retaliated by creating 25 Wood Clones, each using Susanoo. The Kages were able to hold their own against the army of Susanoos, but they were getting too worn down. So they devise another plan, they are able to destroy all of the Wood Clones and almost seal Madara, but he gets angered and reveals the colossal Perfect Susanoo, stating that only Hashirama can beat him.
Then, in an impressive display of amazing destructive power, he uses one of the swords on his Susanoo to slice two nearby mountains in half, striking fear into the Five Kage. He then takes Five steps towards them, and then is surprised to find that Ōnoki still has the will to fight left in him.
As he prepares to strike them down, Itachi had finished manipulating Kabuto into undoing the Reanimation Jutsu. When this happened, his Perfect Susanoo dematerialized unexpectedly and he found himself glowing. He then figured out that the Reanimation Jutsu was undone, so as his soul was going back to the afterlife, he prepared one final attack on the Kage, which Tsunade was able to deflect.
However, he had somehow managed to keep his soul bonded to his body, and then he revealed that one with knowledge of the seals of the Reanimation Jutsu can sever the contract binding them to the technique. So then he released himself from the Jutsu and began to act on his own. He defeated the Five Kage, left them for dead, and then went to the battlefield where Obito was fighting against Kakashi, Guy, Naruto, and Killer B.
Madara possesses the Uchiha clan's famed Sharingan and it's special abilities, including enhanced sensitivity to movement, seeing chakra, copying actions that are within his ability, as well as casting and recognizing illusions. He also attained the Mangekyō Sharingan by killing his friend, and later the Eternal Mangekyō Sharingan after attaining his brother's eyes. With these he's gifted with additional abilities, one of which being able to conjure Susanoo; a giant energy-based humanoid boasting great strength and endurance to protect Madara and fight on his behalf. After gaining Hashirama's DNA his eyes changed again, becoming the Rinnegan. Aside from granting its user all 5 basic nature transformations, it possesses 7 abilities based on the 6 paths of Buddhist reincarnation: gravity manipulation (Deva), body modification (Asura), telepathy and soul absorption (Human), summoning of creatures (Animal), chakra absorption (Preta), Summoning and control over the King of Hell (Naraka), and ruling over life and death (Outer). Having obtained Hashirama's power Madara is also capable of performing wood style jutsu by combining water-based chakra with earth-based chakra using life force as the medium between the two.
In addition to these, Madara possesses the Uchiha clan's secret jutsus which include Grand Fireball and Phoenix Flowers, as well as the superbly powerful Great Fire Annihilation. And when the Kyūbi wasn't sealed, Madara was able to summon the monster and bend it to his will.
The transformation Madara achieved after becoming the jinchuriki of Jūbi.
In this form Madara's appearance changes drastically, as his hair turns dark red, his skin takes a pale gray color, a third Sharingan/Rinnegan mix eye opens on his forehead and his body morphs making it seem like he is wearing a long white mantle ornamented with several black Magatamas as well as black gloves, boots and pants (Although it's also possible that the mantel is in reality a protective chakra cloak).
Additionally, he gained access to several new powers. Some of them being similar to those of the previous Juubi's Jinchuriki Including :
- Truth Seeking Balls : Other than the usual Rikudou staff, Madara was also shown making use of the Gudōdamas for offensive purposes as high speed projectiles, or defensively applying shape manipulation to turn them into a simple protective wall or a large barrier covering his entire body.
- High speed regeneration : Madara was shown surviving and completely recovering from attacks that would have normally killed him. This includes regenerating in a matter of seconds from "Night Guy" (a technique which shattered his ribcage and caused nearly half of his body to melt), surviving Sasuke's Kusanagi sword stabbing his heart (which didn't seem to bother him in the slightest) and regrowing half his body after getting cut in half by while he attempted entering the Kamui dimension.
While some other abilities seem to be unique to him, this includes :
Infinite Tsukuyomi (Mugen Tsukuyomi): Using the power of his third eye and the moon as a catalyst, Madara activates the dreaded planetary genjutsu. Upon activation, the shining light of the moon reflecting Madara's eye illuminates the entire planet, leaving no shadows even in the normally enclosed dark areas. Any leaving creature exposed to this light is immediately immobilized and put under a dream like genjutsu where the victim can live its ideal reality. This makes trapping the victims with the "Divine: Deep forest emergence" easier.
- Divine: Deep Forest Emergence: After immobilizing the victims with the Infinite Tsukuyomi, Madara uses the Deep Forest Emergence to control the roots of the Shinju, spreading them around the whole planet in order capture every leaving person, enclose them within "cocoons" and use them as a Chakra source. Thus once again gathering all chakra in one place, which will sprouting the legendary Chakra fruit.
- Flight: Being able to float in the air or fly at high speed.
Further more, it would seem that the nearly inexhaustible chakra reserve of Juubi boosted the original power of his Rinnegan abilities. This was shown when he used Planetary Devastation (Chibaku Tensei) and ended up ravaging the mountains and land of the Frost Country, pulling their rocks while forming several absolutely massive meteors which (funnily enough) Madara refers to as "rain drops".