Nine Tailed Demon Fox
Names: Nine-tailed Demon Fox.
Creature type: Kitsune (Fox)
Host: Naruto Uzumaki
Unique traits: Near-limitless chakra, incredible strength.
Status: Active, sealed in host.
The nine-tailed demon fox is a truly powerful beast; a single swipe of one of its nine tails can raise tsunamis and flatten mountains. After the demon fox attacked Konohagakure, the Fourth Hokage sealed it into the newborn Naruto by using the Dead Demon Consuming Seal, sacrificing his own life to do so.
The demon fox is a beast of almost pure malevolence. It is intelligent, and has a scathing and sadistic personality. However, it has a sense of honor, and seems to possess a respect (if merely a loathing one) for Naruto and the Fourth Hokage. Additionally, it has a distinct sense of pride and became rather angry and scornful at Naruto when he rejected its chakra when facing Sasuke in Part II, though this might have merely been anger over missing an opportunity to partially usurp control over Naruto's body.
As the demon fox's host, Naruto has accelerated healing, almost unrivaled stamina, and access to the demon fox's immense amount of chakra. The near-limitless chakra allows Naruto to perform his signature jutsu, Shadow Clone Technique, seemingly without limit. He is even able to summon Gamabunta the "Toad Boss", a normally Kage-level feat requiring an amount of chakra proportionate to the size of the summoned creature.
Naruto typically accesses this prodigious supply of chakra from the demon fox during extreme emotional states or life-threatening situations. When he first accessed it, the demon fox's innate rage took over Naruto's mind, causing him to strike out at whatever was near him at the time. Afterwards, Naruto learned to exercise more control over the chakra, and he can now retain his mental state when drawing upon small amounts of the demon fox's chakra. After Jiraiya's training, Naruto learns to summon a small degree of the demon fox's power at will. To do this, Naruto travels into his own mind (depicted as a sewer) and demands that the demon fox give him its chakra. He calls it "rent". The demon fox seems to comply simply because it is amused by Naruto's bravery.
The demon fox's chakra is not without its drawbacks, however. As Naruto draws on more of the demon fox's chakra, his own personality becomes supplanted by the fox's. The degree to which this occurs is proportionate to how much chakra Naruto draws upon. The effect on Naruto's personality becomes significant once he begins accessing his "tailed" transformation states. The tailed transformations appear as fox-shaped auras of red chakra surrounding him. The number of "chakra tails" that extend from the aura indicate its power level, and its effect on his personality. In the one-tailed to three-tailed states, Naruto's personality remains dominant, but he acquires some animalistic behaviors, such as standing on all fours, fighting mercilessly, and a distinct bloodlust.
In his four-tailed state (the highest seen so far), the demon fox's personality becomes dominant. Naruto becomes immensely powerful and destructive in this state, enough so to overwhelm even Jiraiya and Orochimaru. Unfortunately, this state also leaves him unable to distinguish between friend and foe which was shown when he attacked Sakura. Such a large amount of chakra requires stability, so it densely molds around him. As Yamato stated, his body is just a "skeleton" for the chakra. The intense aura created from it both shields and harms him, burning off all his exposed skin and causing him to bleed from every pore. This, combined with the accelerated cell regeneration, weakens Naruto and shortens his lifespan.
In the event of the demon fox manifesting, Naruto's sensei, Jiraiya, prescribes a special written seal that is to be placed on Naruto's body. This seal suppresses the demon fox's chakra and restores Naruto to his normal self. In addition, Yamato has demonstrated a technique that will reverse Naruto's demon fox transformation, enhanced greatly by the First Hokage's necklace that Naruto wears.
The Third Hokage and Kakashi Hatake allude that if Naruto loses all control of the demon fox's chakra, the seal will break and the demon fox will be freed. Though the seal is unlikely to break on its own, the chances of it happening increase as Naruto draws upon the fox's chakra. Soon after the start of Part II, Jiraiya mentions that the seal may be becoming weaker over time. This is evident in Naruto's transformations, which occur much quicker and with greater intensity than they did in the first part of the series, often against his own will. As has been seen during Naruto's training sessions, even the slightest amount of frustration on Naruto's part allows the demon fox's chakra to leak out in excess, and Naruto rapidly progresses to a four-tailed state.
Near the end of the Sasuke and Sai arc, it is revealed that the demon fox is familiar with the Uchiha clan. The precise relationship between the clan and the fox is unclear as of now, but the fox mentions a Madara Uchiha, who possessed chakra more evil ("cursed", as described by demon fox) than the demon fox's own, a trait which Sasuke seems to share. Sasuke also demonstrates the ability to forcefully suppress the demon fox's chakra.
The nine tails of the demon fox is a reference to the belief that a fox may possess as many as nine tails. Generally, an older and more powerful fox will possess a greater number of tails, and some sources say that a fox will only grow additional tails after they have lived for a thousand years. After that period of time, the number increases based on age and wisdom. Foxes that appear in Japanese folktales almost always possess one, five, or nine tails, and not any other number.