After performing the necessary hand seals, a ninja inhales air via their mouth and, gather up chakra in their chest, then spews a large fireball from their mouth after blowing through a ring made by the thumb and index finger of the user, incinerating everything in range. Sasuke is seen doing this technique without making a ring over his mouth. The fireball may ignite externally (as evidenced by Kakashi Hatake's ability to use the jutsu without burning his mask, but may also be seen as pulling it down to blow out the fireball).
According to Kakashi Hatake (in the anime Part II), the Fire Release: Great Fireball Technique was originally created by the Uchiha clan, becoming one of their favorite moves with which they became very adept with. The Uchiha clan also uses the Fire Release: Great Fireball Technique as a "coming of age" technique. This technique apparently requires more than average chakra reserves and most Genin should not be able to do this technique.