Orochimaru is one of the Konohagakure's three legendary ninja or Sannin. He was the student that everyone believed would become the Fourth Hokage, but his hunger for power led him to commit dark experiments and practice forbidden jutsu. After the Third uncovered the truth, Orochimaru left Konoha and formed the Hidden Sound Villagein the Land of Rice. He was responsible for countless immoral experiments and collected many ninja with unique abilities in his numerous hidden bases. He wished more than anything to find the ultimate body and improve himself to the state of a god. He attempted to possess Itachi Uchiha, Kimimaro Kaguya, and Sasuke Uchiha's body, but all of the attempts failed for various reasons, with Sasuke actually reversing the jutsu and possessing Orochimaru's soul only later to have it sealed away by Itachi during the fight with Sasuke. Kimimaro had an illness that prevented Orochimaru from possessing him, and Itachi also reversed the jutsu and severed Orochimaru's left arm after which Orochimaru left Akatsuki.
Orochimaru was originally a student of the Third Hokage as a part of a three-man team consisting of himself, Jiraiya, andTsunade. Team Sarutobi mirrored Team Kakashi in nearly every way. Orochimaru was kind as a child and for a lot of his adult life, but became aloof, arrogant, and sadistic later on. Sarutobi in particular had very high hopes for him, often berating the clumsy Jiraiya and telling him he should be more like Orochimaru. After becoming Hokage, Sarutobi hoped that one day Orochimaru would succeed him. Orochimaru's name is from a mythical tale, Orochi means "large serpent" and Maru is a common suffix in male names.
While Orochimaru's ambitions did include becoming Hokage, his eyes were set upon goals quite alien to the ideals traditionally associated with the title and emphatically embraced by his teacher. Sarutobi knew that "a shinobi's true strength will manifest when protecting something important," and the Hokage's role is to love and protect the people of the village as if they were a family. For Orochimaru, however, Hokage was nothing more than a potential conquest on the way to what truly interested him - power.
Sarutobi hoped to make his student see the error of his ways, but the more time that passed, the more it became clear that Orochimaru was a lost cause. This culminated in Orochimaru kidnapping his fellow Konoha shinobi as human guinea pigs. He experimented on them to develop techniques that would grant him immortality, as he had already decided that he would settle for no less than to learn all jutsu in the world, a task that would take much more than one human lifetime. When the many disappearances were finally traced back to Orochimaru, Sarutobi knew that it was his duty to kill him, but at the time he simply couldn't bring himself to kill his prized student for whom he had had such high hopes. At the same time, he realized that Orochimaru was a twisted and power-hungry man that was not fit to fill the role of Hokage, and when he finally retired years later he chose a student of Jiraiya's, Minato Namikaze, over Orochimaru as his successor, making Minato the Fourth Hokage.
Realizing that he had hit a dead end in his quest to become the ultimate being and had nothing to gain from staying in Konoha, Orochimaru defected from the village and joined the elite criminal organization Akatsuki. His old teammate, Jiraiya, tried to convince him to reconsider, but to no avail - he betrayed the village and the title of the 'Three Legendary Sannin' was no more, though he is still known as one of the Legendary Three. The role Orochimaru played in Akatsuki is unclear, although it is known that he was partnered with Sasori prior to his defection, and they apparently had great respect for each other when they were partners. Sasori also claims that Orochimaru and him did a lot when they were partners in the organization. He then tried to steal Itachi Uchiha's body. Orochimaru was able to use his Living Corpse Reincarnation Technique, but Itachi used his Sharingan to reverse it and damage Orochimaru's body, causing him to leave Akatsuki to aquire a new body. Thus, he chose to go after Sasuke Uchiha. He eventually founded his own village, Otogakure.