The Hiding in Mist Technique is a speciality of the shinobi from Kirigakure, where one causes a mist to spring forth either by using a pre-existing water source, or expelling it from their mouth. They can then go in and out of sight at will from within the pearly-white realm. The mist's thickness is controlled by the amount of chakra kneaded into it. It cannot fool the Byakugan, but, due to the mist being created with the user's chakra, any Sharingan and Rinnegan-user will see the mist coloured by their opponent's chakra — which will effectively hide the user from the dōjutsu.
When Kakashi Hatake uses this in the anime, Itachi Uchiha claims that the mist does not prevent him from using his Sharingan, contradicting both the manga and earlier anime scenes.