Orochimaru was one of the 3 Legendary Sannin of the Hidden Leaf, along with Tsunade and Jiraiya, until his thirst for the knowledge of thr forbidden techniques exiled him from the village. Since then, he has moved on from body to body in a technique that transfers his soul into another one in a bid for immortality. His next victim, or prodigy, as he calls him, is Sasuke.
After his initial encounter with Sasuke in the Forest of Death, Orochimaru gives him a Curse Seal as tantalizing bait; using Sasuke's ambition against himself, so that Sasuke would one day follow him and Orochimaru would claim his greatest power, the Sharingan.
Orochimaru has terrifying offensive techniques, as the exact opposite of Jiraiya. His ability to make Kakashi freeze dead in his tracks by just showing off his killing intent should be indicator of how strong he is.
He failed at an attempt of destroying the Hidden Leaf Village, thanks to the Third Hokage. Whom, before dying, did a special sealing technique, known as Shiki Fuujin, which was able to rip Orochimaru's soul from his body and seal it away, but since he was old and injured, as well as Orochimaru putting up a pretty good fight, he was only able to seal Orochimaru's arms within him.
During the timeskip, Orochimaru has been training Sasuke as his apprentice. He taught him various snake-type jutsu as well as helped him improve his control over Chidori and his Curse mark. Later on in Shippuuden, when we saw Orochimaru revealing his true form, a large white snake. Sasuke decided that Orochimaru is unworthy of having an Uchiha's body. He tried to take over Sasuke's body, however Sasuke defeats him instead, and absorbs him into his own body. He then gained access to some of Orochimaru's abilities, but had to use a small amount of chakra to keep Orochimaru suppressed.
Next time we see anything of Orochimaru is when the two Uchiha brothers, Sasuke and Itachi, fought. Having used up all of his chakra; Sasuke gets overpowered by Orochimaru inside him, and Orochimaru takes over. However, Itachi was expecting that to happen, and he immediately pierced through him with Susanoo. Orochimaru then realized that he was stabbed by a special weapon, the Totsuka Sword, permanently sealing him and removing the Cursed Seal from Sasuke. Orochimaru, in a form of a little white snake, managed to escape from Itachi's Susanoo, but was later killed by Amaterasu's never-ending flame.