The Hunt for Itachi arc is from Part II of the series that spans from chapters 343 to 402 of the manga. In the Naruto: Shippuden anime it begins with episode 113 and is currently ongoing. In the third databook this arc is called the "Itachi Pursuit" (イタチ追跡, Itachi Tsuiseki). Portions of this arc are sometimes considered separate arcs.
Summary
Sasuke vs. Orochimaru
At Orochimaru's lair, a sick Orochimaru is confined to his bed. As Kabuto exits to get more medicine, a blade made of lightning chakra shoots towards Orochimaru through the door. Orochimaru quickly blocks it with his arms and thinks to himself that he does not recognize the shape manipulation, though the chakra itself seems familiar. The blade belongs to Sasuke, who had stopped by to finish Orochimaru off before he left to take on Itachi. He claimed that he had nothing more to learn from Orochimaru and mocks him for wasting his power and time, which angers Orochimaru.
After pinning Orochimaru's arms to the wall, Sasuke attempts to deliver a finishing blow, forcing Orochimaru to ditch his body, revealing his true form: a composite serpent-like entity made up of small white snakes. Sasuke activates his Cursed seal Level 2 and begins to fight Orochimaru. He compares Orochimaru's ambitions to how a snake dreams of flying and tells him that he will get that chance in the talons of a hawk, as he sprouts his curse seal wings.
After he severs Orochimaru's head from his body, Sasuke believes he has won. However, Orochimaru's poisons paralyze Sasuke, and he then lunges at him, swallowing him whole. Sasuke finds himself inside Orochimaru: the place where the body-transfer jutsu takes place. Orochimaru relives a flashback of when he confronted Itachi while in Akatsuki. He finds Sasuke's eyes to be similar to those of Itachi's on that day, and anticipates taking possession of those eyes. After the fight, Kabuto returns with the medicines, but views a scene consisting of Sasuke standing over Orochimaru. Kabuto asks Sasuke which one he is, to which Sasuke replies by showing Kabuto what happened. Sasuke states that he has merely taken over.
Recruiting Hebi
After defeating his mentor, Sasuke frees Suigetsu, whom Orochimaru had imprisoned in a glass tank filled with water. Sasuke leads Suigetsu to the Land of Waves to retrieve Zabuza Momochi's sword from his grave. Upon their arrival, Sasuke notices the bridge that was being built during his time there, now named The Great Naruto Bridge. Suigetsu picks up the sword at Zabuza's grave and explains that he trained under the Seven Ninja Swordsmen of the Mist (which his senpai, Zabuza, belonged to). With the sword, he claims, he might even be able to beat Sasuke. After collecting it, they head for their next target.
In the anime, it turns out that the sword was not beside Zabuza's Grave, and that a man named Tenzen had claimed it for himself. Sasuke and Suigetsu ask the residents of the village where they could find him. Eventually, they discover that he resides in a castle, Southeast of the village. Overnight, Sasuke intrudes the castle, and threatens him to prepare an army of over 1000 men. The next day, Sasuke and Suigetsu prepare to invade the castle. Sasuke offers a wager with Suigetsu, to whoever can retrieve the sword first. After a successful attempt of retrieving the sword, they both depart for their next target - Karin.
After arriving at the base, Sasuke and Suigetsu meet Karin, who sensed their arrival. Sasuke tells Karin to join him, which surprises her. Sasuke replies that since Orochimaru is now gone, there is no need for her to continue to keep watch over the prisoners she is currently guarding, telling an annoyed Suigetsu to free them. Karin relents, but still refuses to go. Sasuke decides that he will just have to find someone else. However, Karin has a quick change of personality and agrees to go if he really wants her to. Suigetsu advises they leave since Karin clearly doesn't want to go. When Sasuke says she's changed her mind, Karin puts her glasses back on and denies this in a rather embarrassed manner, saying that she's coincidentally going the same way they are, at least for the moment.
As the three make their way to the North Hideout, Karin explains that Sasuke's next target, Jugo, is the means behind Orochimaru's development of the cursed seals. When the group gets there, prisoners infected with the cursed seal surround Sasuke's group. When Karin informs them that Jugo is not among the prisoners, Sasuke and Suigetsu dispose of them without killing them (something Sasuke suggests). Having found the keys to Jugo's cell, Karin uses her tracking ability to find him, misleading Suigetsu to the wrong direction while she is at it. At Jugo's cell, Karin unlocks the door, and Sasuke goes in first.
Jugo, who had decided that if the first person to open the door was a guy, he'd kill him, seems delighted to see Sasuke and rushes in for the kill. Sasuke fails in his attempts to reason with Jugo. Jugo and Sasuke have a quick cursed-seal battle, before it is interrupted by Suigetsu. Suigetsu then appears to take over the fight, explaining that beating Jugo to a pulp is the only way to calm him. Jugo morphs his piston arm into a massive forearm blade to deal with Suigetsu. After they ignore Sasuke's requests to stop, Sasuke wraps the two in summoned snakes and exudes an enormous amount of killing intent. Jugo's transformation recedes, and he suddenly rushes back to his cell, demanding they lock it. Karin explains that while the rage-driven Jugo may be violent and bloodthirsty, Jugo himself has no desire to harm anyone.
Jugo finally agrees to go with Sasuke after hearing that Kimimaro, who was consistently able to stop Jugo's rage-driven rampages, died to bring Sasuke to Orochimaru. With his team gathered and dubbed "Hebi" by Sasuke, Sasuke reveals their goal: to kill his brother Itachi. Suigetsu, who wants to take Kisame's sword for himself, is willing to participate. Karin, being enamored with Sasuke, also agrees to help, though she is unwilling to admit that her admiration is the reason. (Suigetsu teases her about it, saying that he knows about something Karin did to Sasuke long ago. However, Karin punches Suigetsu in the face before he can reveal her secret.) Finally, Jugo acquiesces to see how strong Sasuke is, believing he is Kimimaro's reincarnation.
Sakura arrives at Naruto's home to tell him to wash up and get ready. They meet up with Tsunade and Jiraiya, and Tsunade informs them of Orochimaru's death at Sasuke's hands, which Jiraiya's most trusted sources have confirmed. Both Naruto and Sakura seem very happy to hear the news, expecting that now that Orochimaru is dead, Sasuke will finally return to Konoha. However, Jiraiya tells them that is not exactly the case.
In Konoha, Naruto and Sakura come to the same conclusion as Sasuke, reasoning that his desire for revenge will drive him to kill Itachi. Therefore, they decide the simplest path to Sasuke is to find Itachi. As both teams resolve to find Itachi, both he and Kisame wait for the leader to contact them after having captured the host of the four-tailed beast. Once they get into contact with their leader, Akatsuki goes over the recent deaths of Hidan, Kakuzu, and Orochimaru, and Sasuke's new team. Knowing that Sasuke could potentially disrupt their plans, the leader warns everyone to be careful, especially Itachi and Kisame.
In Konoha, Kakashi discusses the overall plan to find Itachi and Kisame. Since simply killing Itachi first would make finding Sasuke impossible, they need to capture him. For that purpose, Team Kakashi is joined by Team 8. Meanwhile, Sasuke takes his team to an old Uchiha outpost run by allies of the Uchiha Clan to stock up on supplies. After Akatsuki finishes sealing the four-tailed beast, Deidara and Tobi decide to either track down Kakashi and Naruto or go after Sasuke.
As Deidara and Tobi search for either of their two targets, the two teams split up. The Konoha ninja split into groups of three: one ninja and two of Kakashi's Ninken. Naruto is accompanied by Hinata and Yamato due to Akatsuki's pursuit of him. Meanwhile, Sasuke's group splits up to gather info on Akatsuki. As they search, the Ninken accompanying Sakura catch Sasuke's scent. Her search leads her into a city, but she is unable to find Sasuke. As she walks through a crowd, the ninken comments how the scent is "moving away," right as Karin is walking by her.
Kabuto reveals himself to Naruto's group, and gives them a book that details everything they learned about Akatsuki. He thanks Naruto for inspiring him to find his own purpose in life, and reveals that he absorbed Orochimaru's remains into himself: about 33% of his body is now Orochimaru's. With it, he plans to become stronger than Orochimaru. After evading Naruto and Yamato, he explains that he needs to control Orochimaru's power, which is slowly taking over his body, after which he will come after Sasuke for killing Orochimaru, and then Naruto.
Sasuke vs. Deidara
Elsewhere, Deidara and Tobi attacked Sasuke. Deidara attempted to attack from above using a bomb, but Sasuke used Hidden Snake Hands to wrap himself with a snake as a shield. Tobi also attempted an attack, but he was scared of Sasuke and ran from him. Deidara told Tobi he was to handle Sasuke, and tested him with small C-1 spiders. Sasuke used the Chidori Senbon to stop the bombs. He then jumped behind Deidara, who used a bomb to distance himself. But Sasuke managed to avoid the bomb. Realizing Sasuke's abilities are great, Deidara used C-2 next, and summons a clay dragon as a battle partner. Sasuke attacks with Chidori Sharp Spear but Deidara is out of range.
Deidara sends a new C-2 bomb against Sasuke and he activates his cursed seal to block the blast. He shoots two giant shuriken at Deidara. Deidara avoids them, but Sasuke attached wires to them. They impale and hit the dragon, and Sasuke flies up with his sword and cuts the dragon's wing and cuts its head off. Deidara falls to the ground, and is impaled with the two shuriken in his arms. Tobi cries out for Deidara, but Deidara tells him to be quiet. He looks into Sasuke's Sharingan eyes and remembers when he first saw them in Itachi.
He was once approached by Itachi, Kisame, and Sasori for a proposal. Deidara was chosen to be on Akatsuki, but refused, loving his position as a terrorist bomber, claiming his works as art and as invincible, and how their beauty comes when they explode. Sasori is interested in Deidara for being an artist and having guts, but claims he is arrogant and can get himself killed quickly. Itachi decides to fight Deidara, claiming if Itachi wins, Deidara joins Akatsuki, but if he loses Deidara is free to go. Itachi shields himself from Deidara's bombs with Shadow Clones, and after a short fight, finishes him off with a Sharingan genjutsu, making it seem like Itachi has gained control of Deidara's bombs, and is about to finish Deidara with one. He stops the genjutsu and frees Deidara, but Deidara still is still forced to join for his loss. Deidara is angered at Itachi and the Sharingan, refusing to accept it as an art.
In his fight with Sasuke, Deidara uses C-4, his most powerful bomb. It explodes and appears to have killed Sasuke, but it is simply a Sharingan genjutsu from Sasuke, the same one Itachi used. Sasuke then appeared to have constricted him with one of his bombs, but the genjutsu is dispelled by Deidara, as he reveals his left eye can dispel genjutsu, and since Sasuke held back when using the technique, unlike Itachi, Deidara was able to dispel it. Deidara tried another C-4 on Sasuke using his last bit of chakra, and went to a safe distance, but Sasuke shielded it one last time with his Chidori Current. He then jumped right next to Deidara and gave him a powerful punch to the face.
Realizing that Deidara was out of chakra and could not move, Sasuke asked where Itachi was. Deidara did not answer, and became insane due to Sasuke's abilities indifference towards his art. He then turns himself into a bomb in a suicide attempt to kill Sasuke. However, Sasuke summoned the snake Manda as a shield, and teleported both of them with a technique, at the cost of Manda's life. His team found him after seeing the explosion, and he went with them to rest, explaining what happened.
After seeing the explosion, Naruto's team heads to it, and Kiba tracks Sasuke's scent. Back with Hebi, Sasuke asks what everyone found out about Itachi. Suigetsu and Karin found nothing, but Jugo communicated with the birds, who were able to sense Akatsuki's chakra coming out of their hideouts, which he marked on a map. They decide to go to the most recently used one to find Itachi. Meanwhile, Itachi heads to an Uchiha Hideout and sends two clones, one to find Naruto, and the other to find Sasuke.
As Naruto's Team goes to find Sasuke, Karin can sense that they're coming, and informs Sasuke. Hebi then leaves, and goes to the Akatsuki Hideout. Before that, Karin realizes that the team possesses scent trackers, so she asks Jugo to have the birds tear up one of Sasuke's shirts, which has a very strong amount of Sasuke's scent on it, and scatter the pieces to throw off Naruto's team. It does, and Kiba can no longer track Sasuke's scent. Naruto realizes that they need to split up, and Naruto finds Itachi's clone. Itachi claims he only wishes to talk, but Naruto knows he needs to catch Itachi. Naruto creates a Shadow Clone that attacks with a Great Ball Rasengan, but Itachi was a clone as well. The real Itachi catches Naruto in a Sharingan genjutsu. In the illusion, Itachi asks why Naruto cares for Sasuke so much, so Naruto claims that Sasuke's like a brother to him, and he's more of a brother to Sasuke than Itachi was. When Itachi goes on the offensive with his genjutsu, Naruto dispels it. Itachi then dispels the clone, having run out of time to talk.
The other clone encounters Sasuke at the Akatsuki Hideout. After a short greeting, Sasuke attacks the clone with his Chidori Current Blade, but Itachi substituted himself with a Shadow Clone as a shield. Sasuke is then caught in the clone's Sharingan genjutsu, but he easily dispels it. Itachi then destroys the clone, telling Sasuke to go to the nearby Uchiha Hideout so they can end their dispute. Sasuke and the rest of Hebi to go to the hideout. Sasuke encounters two of Naruto's Shadow Clones, so he destroys them with Chidori Current punches, and the team continues on. Naruto figures out where Sasuke is, so Naruto's Team goes in pursuit of him. Unfortunately, Naruto's Team encounters Tobi. Naruto attempts two Great Ball Rasengans with Shadow Clones, but the attacks are absorbed by Tobi. Naruto's Team then prepares to finish Tobi off. Meanwhile, Sasuke encounters Kisame, who asks Sasuke to continue on by himself, since Itachi doesn't want interferences. Sasuke has no argument, and leaves his team with Kisame. Suigetsu and Kisame then prepare to fight for the Samehada. Sasuke then goes to the hideout and prepares to battle Itachi.
Jiraiya vs. Pain
Jiraiya tells Tsunade that he is going to, personally, gather information regarding the Akatsuki in the most probable place: the Rain Village. Seconds after Jiraiya successfully enters the village, he was detected by silent security set up by Pain. Konan was quickly dispatched to locate Jiraiya's location.
Jiraiya kidnaps two ninja's from the rain village and learns about the power of Pain. Konan locates Jiraiya and informs Pain who has changed bodies in a secret chamber. Konan then goes ahead and attacks Jiraiya, fighting evenly matched with her for a short time, and Jiraiya then tells about his past with Konan, Yahiko and Nagato. Pain then shows up and attacks Jiraiya. Pain then tells Jiraiya that he wants all to suffer like he did as a child so they will stop fighting and mature like he did. After a little while, Jiraiya enters Sage Mode and summons two toads. Pain then summons two of his other bodies and launches into an evenly matched high-level fight with Jiraiya.
Despite being in his strongest form, Jiraiya fights a losing battle eventually ending up with his arm cut off by his former student. Jiraiya has a flash back to when he met the Toad Sage who told him that he would be a pervert, he would travel the world, he would write a book and he would train the destined child who would either save or destroy the world. He believes this to be Pain. During the fight, Jiraiya learns Pain's secret (although it's not revealed) and his throat is crushed along with being stabbed by five of Pain's bodies. As he lay dying with five swords in his back, he has a flashback of a conversation he had with Minato and Kushina (Naruto's parents) and they want to name their son after the character in his book, thereby making him Naruto's godfather. Remembering this, he forces himself back to life with his own willpower and writes a message on Pa's back. He says he now believes that Naruto is the destined child and it's up to him to decide his future. He then drifts off to his death.
Sasuke vs. Itachi
Sasuke arrives at the Uchiha hideout and confronts Itachi. The battle begins with both of them seemingly using Taijutsu, soon ending with Sasuke cornering Itachi and deciding to ask him one last question before killing him off. Sasuke asks "Who is he"? Sasuke recalls when Itachi said that three of the Uchiha clan would have the ability to use the Mangekyo Sharingan including himself if Sasuke would be able to awaken his. Itachi explains that the person who assisted him when he murdered the entire clan was none other that Madara Uchiha, one of the founders of Konoha and reveals that one of the purposes of the Mangekyo Sharingan is to control the Nine-Tailed Demon Fox. He also reveals that once the Mangekyo Sharingan is activated, it will progressively lead to blindness. Itachi refers to Madara (Tobi, founder of Akatsuki) as his mentor. It then turns out that Sasuke and Itachi's battle so far was pure genjutsu. Itachi then finally activates his Mangekyo Sharingan and reveals that the only way to stop the blindness is to take the eyes of another Sharingan user; he states that this is the reason he left Sasuke alive, and why he pushed him to become stronger. After a flashback of his childhood, Sasuke states "Finally... it all ends here." During their talk, Zetsu watches hidden from the ceiling and his halves begin to comment on the battle.
After securing him in place with a shadow clone, Itachi then proceeds to rip off Sasuke's eyes. It is revealed that the whole fight so far has been a genjutsu, namely Itachi's Tsukuyomi which Sasuke had overcome.
Sasuke shortly lectured Itachi about the tools of the ninja, and how a tool is only as powerful as the ninja who uses it. Itachi tells Sasuke that he will make his dream, of ripping out his eyes, a reality and readies the Amaterasu. Itachi and Sasuke both use the Great Fireball Jutsu, and Sasuke holds a slight advantage until Itachi uses Amaterasu which burns out Sasuke's fireball immediately melting through his remaining Curse Seal Level 2 wing and scorching his body. Itachi prepares to rip the eyes out of the half burned Sasuke, but the corpse is shown to be an empty shell left behind by Orochimaru's Kawamari (Shedding Skin) Jutsu, and the real Sasuke has dropped into the floor below. He uses a new ninjutsu, named Fire Release: Great Dragon Fire Technique from down below. Itachi dodges, but it still burns his arm. Soon it begins to rain, and Sasuke says that this new jutsu is unavoidable. Zetsu watches the entire fight, narrating their movements and adding background to mysterious moves.
Sasuke charges his final technique, Kirin. A huge creature made of lightning appears fueled by the Grand Dragon Fire technique which had dumped a huge amount of residual heat into the upper atmosphere and Sasuke's chakra remained suspended in a usable form, changing with the atmosphere from simply fire chakra into a bolt of lightning characterized in the same form as the earlier Grand Dragon Fire technique, but cast instead from lightning. Sasuke hits Itachi who appears to be dead.
Itachi is then shown to be alive somehow and reveals a third Mangekyo technique: Susanoo, which pulls out the legendary Sakenagi Longsword. Giant snakes suddenly appear out of Sasuke. One of them revealing Orochimaru inside its mouth. Sasuke, having used up nearly all of his chakra fighting Itachi, could no longer suppress Orochimaru, who has been inside of Sasuke since his failed attempt at taking over his body. The snakes are all killed and Orochimaru is stabbed by the Sakenagi, sealing him in an eternal dream state, and the remains are subsequently sucked into the Sake jar that the Sakenagi Longsword is sheathed in.
Itachi then asks Sasuke if that's all he has. Sasuke then proceeds to attack Itachi again ending in a futile attempt as all his attacks reflected by another effect of Susanoo, Yata's Mirror, which reflects all attacks directed at Itachi. Sasuke is knocked back by his own attacks and lies on the ground. Itachi seems to be invincible when the Susanoo jutsu begins to fade and Itachi walks toward his brother seeking his eyes. When Itachi reaches Sasuke he pokes Sasuke's forehead and says, "I'm sorry Sasuke. There won't be a next time," a reference to his constant unfulfilled promises to train with Sasuke in their youth. Itachi then dies of exhaustion. Zetsu figures that Itachi must have been injured before the battle started, also noting that Itachi was unable to dodge attacks he would normally be able to. Sasuke then smiles and closes his eyes before collapsing himself, as Itachi's Amaterasu continues to burn around them.
Meanwhile, Naruto and the other members of the 8-man squad continue to fight Tobi. Shino attacks with his bugs and even manages to completely swarm Tobi with them. Tobi escapes from the swarm unharmed and Zetsu arrives to tell him that Sasuke won the battle and that Itachi is dead. This was no surprise to Tobi. Zetsu also says that Sasuke is probably dying as well. Just before Tobi and Zetsu leave, Kakashi notices Tobi's Sharingan. Kakashi states this, while Tobi and Zetsu flee to the battle-site. Hinata sees storm-clouds and the flames of Amaterasu with her Byakugan. Naruto and the group pursue them. Meanwhile Tobi and Zetsu reach Sasuke. Tobi tells Zetsu to take Itachi's corpse. Naruto's team reaches the flames, and Yamato uses Earth Release: Earth Flow Divide to create a path through it. Naruto becomes angry when he realizes that they were too late.
Truth About the Uchiha Clan
Sasuke wakes up in a large room. Tobi appears from the shadows and says he will tell Sasuke "the truth" of Itachi. He then begins to take off his mask. As Madara's Sharingan is shown, Sasuke's Sharingan is turned into Mangekyo. His eyes bleed and Amaterasu appears around Tobi. Tobi says that Itachi implanted his abilities into Sasuke, and that they would activate as soon as Madara's Sharingan is shown. Madara then says that Itachi did this to kill Madara, and protect Sasuke. Sasuke doesn't believe him and yells at Tobi to go away. Tobi then begins to tell Sasuke the secret, about how Itachi tried to protect the village and Sasuke. Itachi was ordered by the elders of Konoha to annihilate the Uchihas because they were planning a coup d'état against Konoha. Itachi did this because he detested war and wanted to maintain Konoha's stability. Madara also tells Sasuke the history of Konoha and the Uchihas. This triggers a flashback to moments before Itachi's death; revealing that he was not seeking his brothers eyes but in his final stance with Sasuke poking him on the head (as he did in Sasuke's childhood) and smiling at him. After this Sasuke is shown joining back up with Hebi with his new Mangekyo Sharingan. He tells the group that they will be called Taka from now on, and their goal is "the complete and utter destruction of Konoha."