The Invasion of Pain was the attack on Konohagakure by the Akatsuki leader, Pain, in search of Naruto Uzumaki, the container of the Nine-Tailed Demon Fox.
Background
Pain had been instructed by his benefactor, Tobi, who is said to be Madara Uchiha to capture Naruto. When Jiraiya infiltrated his village, Amegakure, Pain was forced to deal with him before he could go after Naruto. Although he was able to kill Jiraiya, Pain had lost one of his six bodies and had to find a replacement before he could move on to Konoha. Furthermore, one of Jiraiya's toads had managed to escape with knowledge of him.
With the information gathered from the toad, the body Jiraiya had defeated, a prisoner he had captured, and a coded message he had made before his death, Konoha had ample sources of information concerning Pain. While some of Konoha's forces dedicated their time to deciphering what Jiraiya had left to them, the rest of the villagers prepared for Pain's arrival. The defensive measures that had been erected since the last time the village was attacked were presumably built upon. Many of the Konoha ninja were kept home. However, Konoha still took part in its ninja mission business. Team Guy, Hiashi Hyuga and Hanabi Hyuga were away when the attack begins.
Naruto, knowing that Pain would be coming for him, decided to make use of the time Jiraiya had bought for him. He went to Myōbokuzan, the home of the toads, to learn senjutsu for his inevitable encounter with Pain. Kōsuke was left in Konoha to send word to Naruto when Pain eventually arrived.
Attack
Pain and his partner, Konan, arrived on the outskirts of Konoha and eliminated all of the village's scouts. As the village was surrounded by a detection barrier, Pain's Animal path was sent in to the village alone to fool the Barrier Team, leading Konoha to believe there was only one invader. After infiltrating the village, the Animal path summoned Konan and Pain's other five bodies to its location, where they dispersed.
The Animal path, the Asura path, and the Preta path acted as diversions. The Animal path summoned a variety of creatures to draw Konoha's attention. The Asura path used its many weapons to wreak havoc and destroy the village. The Preta path engaged whatever forces it came upon. Konan, the Deva path, the Human path, and the Naraka path dedicated their efforts to finding Naruto. The Human path read the villagers' minds. The Naraka path asked those he encountered what they knew and then used its abilities to see who was lying. Konan and the Deva path used the threat of death to find out what they wanted.
In the initial phase of the attack, Konoha mobilized its forces, expecting only one intruder. Once it became apparent that there was more than one attacker, the village switched tactics, focusing in on the diversionary Paths. The ordinary citizens and those that had been injured in the initial wave fled to the Konoha hospital. Sakura Haruno provided defense for the hospital and healed what injuries she could. Tsunade, the Fifth Hokage, instructed Kōsuke to call back Naruto. Danzo, having other plans, killed Kōsuke to keep Naruto from returning. From the roof of the Hokage Residence, Tsunade summoned Katsuyu. Tsunade then had Katsuyu divide, seek out, and adhere to every villager so that she could tend to the entire village remotely.
Kakashi Hatake, recognizing Pain's plan, engaged the Deva path in battle. The Asura path came to the Deva path's defense. Although Kakashi was able to defeat the Asura path, he could not defeat the Deva path as well. He had Choji Akimichi, who he had fought beside, take knowledge of the Deva path's abilities to Tsunade while he bought time. While Choji informed Tsunade of what they had learned, Kakashi was killed by the Deva path.
Across the village, Konan and Pain's remaining bodies began attracting the attention of Konoha's defenders. The Animal and Preta paths then switched objectives. The Animal path assaulted the location where Jiraiya's prisoner was being held and tried to eliminate everyone at the location. The Preta path found and disposed of the body (and its chakra receivers) that Jiraiya had captured. The Deva path located and spoke with Tsunade, but became irritated by her words. When the Human path captured Shizune, Pain was able to discover where Naruto was.
The Deva path had Konan and the remaining Paths evacuate while it used a large-scale Shinra Tensei to destroy the village and teach Tsunade "true pain." In a brief moment between when the destruction began and when it was completed, Tsunade had the remaining Katsuyu copies shielded the hospital. Tsunade also dedicated what was left of her chakra to keeping the villagers safe. In the wake of the destruction, all that remained of Konoha was a large crater, the Hokage Monument, and huge amounts of debris, ruins, and half-destroyed infrastructures.
Counterattack
Shima, having been near Konoha, noticed that something was wrong. In unison with the village's destruction, she summoned Naruto, Gamabunta, Gamaken, Gamahiro, Gamakichi, and Fukasaku to the village's center. When the dust cleared, Pain and his six bodies (the Asura path having been restored by the Naraka path), gathered to face Naruto. After viewing the full scale of the destruction and the scope of the damage, Naruto instructed the rest of the villagers not to interfere with the fight.
While the Deva path's abilities were recovering from its massive attack, Naruto used his new senjutsu techniques to defeat the other five bodies. Before he could begin fighting the Deva path, its powers returned. He got rid of Naruto's toad allies and captured him, rendering him immobile with its Chakra Disruption Blades. Defying Naruto's orders, Hinata Hyuga came to his aid, and was struck down and appeared to have been killed, all after revealing her feelings for Naruto. Naruto, in a fit of rage, erupted into his six-tailed transformation.
With the transformation, Naruto gave in to the Nine-Tails' animal instincts in return for power and freed himself from Deva path's Chakra Disruption Blades. After charging a Six-Tailed Fox Menacing Ball, Pain diverted Naruto's attack ,causing another massive explosion to shake Konoha. Needing more chakra to face Naruto's new form, the Deva path moved to a location closer to Konan and Nagato, Pain's true body. Naruto pursued him, finally giving the village a chance to regroup and tend to the wounded. After getting close enough to Nagato, Deva path performed Chibaku Tensei, nearly capturing Naruto in a large, floating sphere of earth. This pushed him into the eight-tailed transformation eventually breaking out of the trap.
After delving into his mind and resealing the Nine-Tails, Naruto exited the transformation and prepared to face the Deva path again. Knowing that it's abilities needed 5 seconds to recharge, Naruto used an elaborate array of backup plans to eventually defeat the final path with a Rasengan to the chest. After winning the battle, Naruto went to meet with Nagato. A skeptical Nagato berated Naruto for trying to stop his plans for peace, despite not even having an alternative plan. Upon hearing Nagato's story and realizing how hatred gave birth to Pain, Naruto decided to have faith in their teacher's teachings and not kill Nagato. Nagato, believing that Naruto would be able to find peace, revived all the people killed during the invasion, sacrificing his own life to do so.
Aftermath
With the villagers revived by Nagato's jutsu, Konan, having lost the only person left she cared about, decided to leave Akatsuki. She also promised that Amegakure would help Naruto achieve his and Nagato's vision of peace. Though their ninja force was revived, the village itself was left in ruin. How the neighboring countries reacted to this attack is unknown. After exerting all her chakra to defend the village, Tsunade was left in a comatose state. The Fire Daimyo and the rest of the village's governing body assembled, and Danzo used his Sharingan to hypnotize the Fire Daimyo and make him the acting Sixth Hokage until a vote of confidence can be held. His first act as the acting leader is to have Sasuke Uchiha classified as a missing-nin and marked for assassination. At this point an envoy from Kumogakure arrived with the invitation to the Summit of the Five Kage.