12 years in the past, the Village of Konoha is attacked by a monstrous demon fox known as the Nine Tails. The demon is terribly powerful and the shinobi who battle it are no match. Suddenly a giant toad with a long pipe appears, with a man standing on top of it. This man faces the Nine-Tails and forms a set of hand seals, then a blinding light appears. This man was the 4th Hokage and he sacrificed his life to seal the essence of the Nine Tails into the body of a baby.
In the present, a blond boy of 12 years old runs away from 2 pursuing shinobi while carrying a bucket of paint in his hand. The ninja leap from building to building as they shout that he is in deep trouble. The blond boy then tells them all to shut up and claims that none of them could have done something this horrible.
Back at the scene of the crime, there the great mountain sculptures are covered with graffiti. Some shinobi report to an old man, the Third Hokage and leader of the village that Naruto (the blond boy) has put graffiti all over the great Hokage monuments.
Meanwhile, Naruto seems to have lost his pursuers thanks to some quick camouflage. After the shinobi leap past his hiding place, he lowers the camouflage cover and chuckles. However he is caught by his instructor Iruka who lectures him for skipping
Back at the Ninja Academy Naruto is tied up and forced to listen to a loud lecture from Iruka about how he has failed the graduation exam twice. Seeing that Naruto is not sorry at all, he turns to the and says they are going to review their transformation jutsu again. The groans. A few moments later, the lines up and demonstrates the jutsu. First up is Sakura Haruno, a girl with long pink hair who flawlessly transforms into her teacher.
Her inner self gives a little cheer and she turns to another student, Sasuke Uchiha to ask if he saw her performance. She seems to have a thing for Sasuke but he does not really notice her. He also performs the jutsu perfectly and then it is Naruto's turn.
As Naruto steps up, some of the other students say they always have to pay for his mistakes. Naruto says he does not care and he steps out of the line. With a smile, he transforms into a beautiful naked woman whose parts are covered by small clouds. The girl winks and the act gives Iruka a nosebleed. He transforms back and laughs calling the move his Sexy Jutsu but Iruka is not amused and he shows it.
The scene changes and now Naruto is cleaning up the mess he made on the Hokage monuments with a rag. Iruka explains that he can't go home until he's cleaned all of it. Naruto doesn't care as he has no one to go home to, and Iruka asks if he wants to go out for ramen (Japanese noodle dish) after he finishes. This prospect excites Naruto and he rushes back to work.
The scene is now at a ramen stand called Ichiraku Ramen where Naruto eating his ramen voraciously while Iruka asks him why he put graffiti all over the monument. He says that the Hokage are very important and Naruto reassures Iruka that he knows how great they are. He polishes of his ramen bowl and explains that Hokage are the number one ninjas in the village. He then recalls an image of the monument of the Fourth Hokage and how he saved the village from the Nine Tails. Iruka asks why he did it if he knows and Naruto replies that he will be better than all of them. He will be the greatest of them all and earn the respect of all those around him.
Iruka sits there dumbfounded with a noodle halfway in his mouth. Naruto then asks Iruka for a favor, and Iruka thinks he wants seconds but instead Naruto asks if he can borrow Iruka's Leaf head protector (all ninjas wear one as a symbol of the village they're from).
Iruka says to Naruto that he must graduate to be allowed to wear one since it is a symbol that he's come of age and proven his strength. Naruto exclaims that that's stingy of him and Iruka asks him if that is why he removed his goggles. Frustrated, Naruto shouts that he wants another bowl.
The next day at the Ninja Academy Naruto prepares to take the graduation exam. Iruka explains that those that are called will proceed to the next room and will be tested there. The test will be to do the Clone Jutsu. Naruto freaks out as he comments that it is his worst skill, but upon entering the room he seems confident that he'll do it. Naruto gets ready, and performs the jutsu, but only manages to create one clone, and one that looks almost dead at that. Iruka stares at it for a moment in shock then he shouts that he's failed. Another examiner named Mizuki, starts to explain that Naruto has excellent athletic ability and stamina and that he technically did make a clone, but Iruka argues that everyone else made at least three and Naruto's was useless. He can't let him pass.
Outside of the school Naruto sits on a swing watching as the proud parents congratulate their children for gaining their forehead protectors. Two women start to talk about him and how they're glad he didn't pass because of something he is, but they don't say yet. The instructor Mizuki approaches Naruto, and meanwhile Iruka stand together as the Hokage says he needs to speak with Iruka. Moments later the swing is shown empty as Iruka answers yes.
It's now sunset and Naruto and Mizuki and sitting on a roof having a conversation. Mizuki explains how Iruka isn't picking on him, but Naruto doesn't understand why he's the only one not to pass. Mizuki explains how Iruka probably wants him to become genuinely strong since they're both orphans. Naruto still persists that he really wanted to pass. Mizuki chuckles and tells him that there's no choice now, and he's going to tell Naruto a special secret. Naruto wonders what he's talking about. At Iruka's house, Iruka lies in bed thinking of what the Hokage said about Naruto and how like him, Naruto grew up not knowing his parents. Iruka then has a flashback of the Nine Tails attacking and him as a child being carried away by a shinobi even while he shouts that his parents are still fighting. Mizuki then shouts for Iruka to wake up and Iruka comes running outside to hear Muzuki state that they must go to the Hokage's place because Naruto has stolen the Scroll of Seals! Iruka looks shocked and he says he will be right there.
Deep in a forest at night, Naruto reads from the stolen scroll about learning new techniques, and the first one to start is the Shadow Clone Jutsu. Naruto groans in frustration at having to work on a clone jutsu again. Back in the village the Leaf Village ninja gather to solve the problem of Naruto. They say the scroll was forbidden by the previous Hokage and it must not be allowed to leave the village because of how dangerous it would be in the wrong hands. The Hokage agrees and orders them to bring back Naruto as the ninja scatter in various directions.
Iruka wonders where Naruto went, and Mizuki heads off, planning to kill Naruto and take the scroll for himself.
Back at the forest Iruka finally finds Naruto who is exhausted and bruised up from his training. He greets Iruka with a grin and says he only had time to master one jutsu. Iruka notices Naruto's bruises and comments on how hard he must have been working. Elated, Naruto says that if he shows his new jutsu, Iruka can let him graduate. Iruka asks who told him that and Naruto explains that it was all explained to him by Mizuki.
At this Iruka is even more shocked and confused. Suddenly, he shoves Naruto out of the way as a barrage of kunai(throwing knives) come flying at Iruka from behind them. He is hit by the kunai and Mizuki stands on a nearby tree. Mizuki states that it's impressive that Iruka found the hidden area, and Iruka realizes what's going on.
Mizuki asks Naruto to hand over the scroll to him, but Naruto is confused and asks what's going on. Iruka pulls the kunai from his leg and explains to Naruto that he must never hand over the scroll as it has forbidden techniques sealed in it, and Mizuki used Naruto in order to get his hands on it. Naruto turns to Mizuki and realizes what's going on. Mizuki counters, saying that Iruka wants the scroll for himself, but Iruka tells Naruto not to listen to him.
Mizuki says he'll tell Naruto the truth but Iruka doesn't want him to. Mizuki begins to explain that twelve years ago, in the village a rule was created, a rule no one was allowed to tell Naruto about. Naruto starts to get really intrigued now but Iruka still doesn't want Mizuki to tell. However, Mizuki continues telling Naruto that he is the Nine Tailed Fox and that is why everyone hates him. Even Iruka hates him since his parents were killed by the Nine Tails.
Iruka yells at him to stop, but Naruto is in a state of shock now as he continues to explain that Naruto was lied to by everyone, and asks him if he found it odd the way people treated him. Tears fall from Naruto's eyes and he is filled with anger as Mizuki says that no one will ever acknowledge him because of what he is.
Iruka remembers something he was told by the Hokage who said that Naruto has never known a parent's love, and that he's hated by all the villagers because of that incident and all he could do to get attention was create mischief. Now as he tries to seek acknowledgment of his existence in any possible way, he acts tough when he is really suffering. The flashback ends, and Mizuki throws a big shuriken (throwing star) at Naruto.
Naruto tries to scramble away, but Iruka yells for him to get down and blocks the shot with his own back. Iruka coughs up blood, and a scared Naruto asks why he did it. Iruka remembers his past and says that they are the same. Iruka's eyes fill with tears as he says that he understands how Naruto feels. He is lonely and it hurts inside and he could have been there for him more.
Iruka then apologizes to Naruto and says that no one should have to suffer that much. Mizuki starts to laugh and states that Iruka always hated Naruto for killing his parents, and that Iruka is still trying to get the scroll back.
Naruto cannot make sense of all of it and he runs off into the forest. Iruka calls out after him but Mizuki says that Naruto will use the scroll to take revenge on the people. Meanwhile Naruto runs through the trees still trying to understand everything. Mizuki says that Naruto's eyes are like a demon fox's. Iruka shouts that Naruto isn't like that and he pulls the shuriken from his back and throws it back at Mizuki who calmly steps out of the way.
Mizuki says that if he kills Naruto, he'll get the scroll, and then he can take care of Iruka later. He leaves in Naruto's direction and Iruka follows after a moment saying he won't let him.
In the village, the Hokage watches everything threw a crystal ball. He comments that Mizuki has hurt and confused Naruto with his words. As he watches Naruto run through the forest, he says that Naruto is now afraid like never before and that the sealed power may be released.
On top of that, he is in possession of the Scroll of Seals, and even though the odds of him breaking the seal and letting the Nine Tails loose are one in a million, it is possible. He says that if it does happen...; but he does not finish the sentence.
Back in the woods, Naruto continues his escape. Iruka appears behind Naruto and assures him that Mizuki was lying, and to pass him the scroll. Naruto leaps forward and delivers a hard blow to Iruka who falls to the ground. Naruto lands nearby and Iruka transforms back into Mizuki as he asks how Naruto knew he was not Iruka. Naruto grins then transforms back into Iruka saying that he is the real Iruka.
Mizuki calls Iruka a fool and asks Iruka why he is protecting Naruto. Iruka says that he will never get his hands on the . Mizuki smiles and says that Naruto is just like him now. Iruka does not understand and Mizuki says that Naruto wants the scroll for his own power and that is how beasts are. Iruka agrees that he is right and Naruto gasps in his hiding place behind a tree.
Iruka says that is how beasts are, but Naruto is not like that. Naruto is one of a kind, as he works hard and puts his whole heart into it. Iruka goes on saying that Naruto often makes mistakes and people get on his case for it but it just makes him stronger. He is Naruto Uzumaki of the Village Hidden in the Leaves. That is what separates him from being a beast.
Naruto listens behind the tree and tears form in his eyes. Mizuki asks him if he really believes that. Then he pulls his remaining shuriken off his back and says though he was going to save Iruka for later, he has decided to kill him now.
Mizuki charges at Iruka, shouting at him to die but suddenly, Naruto appears and smashes him in the face with his knee. Mizuki goes flying and Iruka is surprised by his appearance as Naruto stands defiantly saying that if Mizuki ever lays a hand on his sensei, he'll kill him.
Mizuki says that he could destroy Naruto with a single move and Naruto tells him to take his best shot. Naruto forms a seal and uses his new technique the Shadow Clone Jutsu. Suddenly, all the space around them is filled with hundreds of clones. Iruka's eyes widen as he realizes that they are solid clones instead of illusions and he grins saying that Naruto has mastered an extremely advanced technique.
Mizuki's eyes also widen with shock and Naruto attacks. When Mizuki lies bloody and broken on the ground, Naruto goes over to Iruka saying that he may have overdone it. He asks Iruka if he's alright and and Iruka says he is fine will thinking to himself that Naruto's dream of surpassing the Hokage may not be impossible.
He tells Naruto to come over because he wants to give him something. Meanwhile, the shinobi gather saying that none of them can find Naruto. The Hokage emerges to calm them down and says that there is no longer any threat and Naruto will return soon.
Back in the forest, Iruka tells Naruto to open his eyes. Naruto complies and blinks for a few moments as a beaming Iruka tells him that he has graduated. The sun rises and the two are bathed in its light. Naruto notices the forehead protector around his head and leaps at Iruka to hug him. Iruka says that they are going for ramen to celebrate. Iruka says to himself that this is only the beginning and the road will get much tougher from now on.