Itachi is one of the two remaining members of the Uchiha clan, he graduated from the chuunin selection exam at the age of 10, and when he was 13 he already became an ANBU Captain. Together with his brother, Sasuke, they're the only known shinobi still alive after the Clan's massacre. The clan, once praised as the top clan in Leaf village, was wiped out by Itachi himself. Itachi, a genius praised as the clan's future, killed his entire family in a single night. Everybody except for his little brother Sasuke, whom was forced to watch the bloody annihilation of everyone he knew and loved.
Itachi, has the feared Sharingan eye bloodline trait. An ability used to copy an opponent's techniques, see through their movement, as well as closely focus on anything the bearer might need to, better than the ordinary human eye. Having fully mastered this ability, he is able to use it's most advanced form; the Mangekyou Sharingan.
After the extinction of the Uchiha clan, Itachi left his village, became a missing-nin. He forced his brother to live a painfull life due to witnessing what he did, swearing that he will avenge the clan and kill Itachi. The reason why he murdered all members of the Uchiha clan is not known fully known. He said it was to see if he could do it. And most likely to obtain the Mangekyou sharingan, which is said to only be possible to get when the user has lost everyone they love and care for, or a desperate situation which is life threatening, after losing a best friend. Itachi said something second Mangekyou sharigan user besides himself, as well.
Itachi is a member of the Akatsuki an organization comprised of "Sly S-Rank Criminals" as Kakashi stated. Their ultimate goal is unknown, but we do know they're after the jinchuuriki and Itachi and his partner Kisame were ordered to track down the Kyuubi (The Nine Tailed Fox Demon) jinchuuriki, and take him back with them. In other words, they were ordered to kidnap Naruto, the host in which the Kyuubi was sealed. Some time after Itachi joined Akatsuki Orochimaru tries to take over Itachi's body, but fails and ends up having his hand severely damaged. After this incident Orochimaru leaves the organization.
Itachi first appeared in episode 80, where we breifly veiwed him and Kisame observing the ruined Leaf village, after Orochimaru's invasion. Itachi and Kisame get detected by Kakashi who is defeated by Itachi quite easily using the Mangekyou Sharingan. Kakashi being defeated so easily, searches for a way to counter the Mangekyou Sharigan. We have yet to see Itachi's true power, but considering his Sharingan and the fact that he's very skilled with genjutsu and ninjutsu makes him a force to be wreckend with.