Hashirama was originally the leader of the Senju Clan. He stood at the top of the ninja world and everyone acknowledged his superiority. After fighting against the Uchiha clan for so long, the Senju's main rivals, he eventually offered an alliance with them that they accepted. Soon after they made a deal with the Land of Fire to form Konohagakure, and the system of one country and one ninja village was created and quickly adapted by the other countries, as a result the world became rather peaceful.
He taught the "Will of Fire" to the villagers and had a special blood-line ability to create trees and forests. He used this ability to create the forest surrounding the village and the village's unique landscape. Hashirama could also control Bijū and originally had several Bijū under his command, but he gave them to other countries as a sign of trust and to balance power.
Some time later, he and the leader of the Uchiha clan, Madara had a falling out over the rights of leadership and who would be the head of the village. Madara was prideful and paranoid, afraid that the Senju would subjugate the Uchiha clan if they were in control so he challenged Hashirama to a duel. After a whole day of fighting and devastating the surrounding landscape, Hashirama emerged victorious and became the First Hokage. Their battle was so great that it shaped what is now known as the "Valley of the End." The village engraved statues of Madara and Hashirama facing each other in the sides of the valley's waterfall. After the battle where he gained control of the Kyūbi from Madara, his wife Mito Uzumaki, sealed it within herself.
After becoming Hokage, another village sent their best ninja to assassinate him, but Hashirama defeated him. He died of illness not long after the formation of the village, and his younger brother Tobirama succeeded him as the Second Hokage.
Battle of Kages
Hashirama's presence in the world wouldn't end with his death. Orochimaru, one of the three legendary Sannin, played around with Hashirama's and Tobirama's abilities, implanting Hashirama's cells inside of a Konoha shinobi named Yamato to give him Mokuton and discovered how to use Tobirama's Impure World Resurrection jutsu. He used this jutsu to bring back both of the Senju brothers during his attack on Konoha and had them fight its current Hokage, Hiruzen Sarutobi. Throughout the fight, Orochimaru chided his former Master for going easy on his two teachers and even though he was being controlled, Hashirama expressed regret about fighting Hiruzen. In the end, Hiruzen used Minato's Reaper Death Seal to seal him and Tobirama, trapping them in the Shinigami.
Explaining the Truth
Years later, Hashirama would again be summoned by Orochimaru, but his time with the other three Hokage and not for some military action. Sasuke Uchiha sought out the knowledge of the founding fathers after being told the disturbing truth about his brother and needed to hear the facts from Hashirama himself about certain things, and this would determine whether or not he take action against Konoha or choose to defend it. Hashirama sat down with the young Uchiha and answered all of his questions to the best of his ability, telling him about the history of the village, his adventures with Madara when they were younger, and unfortunately the tragic history of the Uchiha. Once he was done and Sasuke was satisfied, the now-revived Hokage were informed about the war raging on in the world and that Madara himself had been revived and intended to place the world under a genjutsu. Hashirama and the other Hokage took a second to land atop each of their respective busts on the Hokage Mountain, and then set off to the battlefield to assist the Allied Shinobi Forces in the war effort.
Battle Against Ten-Tails
As soon as Hashirama and his fellow Kage arrived to the battlefield, they immediately set out to work. The Ten-Tails had recently been released from the control of Madara and Tobi by the valiant efforts of the combined shinobi, but was now on a rampage and attacking without remorse. It was only due to the timely arrival of Minato that the Alliance was saved from the Ten-Tails' deadly Jūbi Bomb, its stronger version of a Bijū Bomb. To prevent such an event from happening again, Hashirama and the other Hokage erected a large barrier around the Ten-Tails, and when it tried to launch another Jūbi Bomb, it was contained by the more powerful barrier. Hashirama then used his Wood Clone jutsu and had some of his clones go open small sections of the barrier to allow the Allied Forces inside and a chance at defeating the main body of the Ten-Tails, while one clone went off to find and fight Madara. Hashirama, already in Sage Mode, used his Bijū-suppression powers to try and limit the Ten-Tails, and as he opened small sections in the barrier, the Ten-Tails created thousands of smaller versions of itself to fight against the shinobi.
Naruto Uzumaki and Sasuke Uchiha eventually managed to strike the Ten-Tails' main body with a powerful combination jutsu, but this only slowed it down. The Ten-Tails only sectioned off that part of its body and literally dropped it, stopping the burning damage it was receiving from Sasuke's jutsu. Just as this was happening, Tobi, actually Obito Uchiha, teleported back into this dimension after receiving a dire injury from Kakashi Hatake in the Limbo dimension. Seeing his chance, Madara took advantage of the injured Obito and tried to force him to fully resurrect him from and Edo Tensei form back to flesh and blood, but before he could do so, Obito was struck by Minato and collapsed. Before he died, though, Obito managed to absorb the Ten-Tails into his body, becoming its host and jinchūriki.
With his new found power, Obito uses chakra arms to pull down and destroy the barrier that had effectively held the Ten-Tails earlier, and as Hashirama, Tobirama, and Hiruzen rushed to Naruto and Sasuke's side, Hashirama noted that Obito was now stronger than him. Inclined to agree, the other Hokage then tried to come up with a strategy, but Obito proved too fast for them and managed to destroy half of Hashirama's Edo Tensei body, as well as Tobirama's. Taking advantage of the moment, Hashirama used his wood constructs to wrap up Obito while his brother applied multiple paper bombs that they hoped would damage the new enemy. It did not. Before he could jump back into the fight, however, Madara appeared and was ecstatic to fight Hashirama again. Knowing he couldn't leave Madara to attack the rest of the Alliance, Hashirama summoned his Wood Golem and did battle with Madara's Perfect Susanoo while the other Kage helped Naruto and Sasuke fight Obito.
Hashirama manages to pin Madara just as the other Kage, Naruto, and Sasuke manage to extract the eight Bijuu from Obito and defeat him, but as he's losing his life force, Madara successfully forces him to perform one of the Six Path's jutsus to bring him back to life, restoring his body back to normal. Because of this, Madara is able to gain the upper hand against Hashirama and knocks back the now released Tailed Beasts. Returning to Hashirama and binding him with chakra receivers, Madara siphons off his senjutsu chakra and takes it for himself, leaving the Senju unable to move as he faces off against the remaining forces of the Alliance. Now that he's alive, Madara summons back the Gedo Statue and uses its and his power to suck back in the nine Tailed Beasts back into the statue, stripping Naruto of Nine Tails (an act that kills jinchūriki), defeating and immobilizing Tobirama, and mortally wounding Sasuke. With the Tailed Beasts in his possession, Madara becomes the next host and jinchūriki for the Ten-Tails and heads off to implement his ultimate plan.
He is stopped, however, as Might Guy intercepts and engages him, allowing time for Naruto and Sasuke to receive powerful abilities from the spirit of the Sage of Six Paths. With these new powers, Naruto and Sasuke push Madara to the breaking point, but ultimately fail to stop him from casting a genjutsu on the surface of the moon, which reflected back to earth and trapped everyone on the planet. Not long after, though, Madara would be overwhelmed and consumed by the rabbit goddess Kaguya.
Ending the War
With Madara now "defeated", the chakra receivers holding Hashirama and Tobirama in place vanished, and soon their Edo Tensei bodies regenerated and they could move freely again. As Naruto, Sasuke, Kakashi, Obito, and other team member Sakura Haruno were the only living people not affected by the Infinite Tsukuyomi (world-wide genjutsu), they were left to fight Kaguya, and did so through many of her dimensions as she transported them during the fight. Soon, Hashirama and the other Edo Tensei Hokage were contacted by the spirit of the Sage of Six Paths as well, and he taught them a technique to bring back Naruto and the others from Kaguya's dimension as it collapsed in itself after she was defeated. Combining their power, and receiving power from all the previous Kage as well, Hashirama and company were able to successfully bring back Naruto, Sasuke, Sakura, and Kakashi so that Naruto and Sasuke could undo the jutsu affecting the world. As the Edo Tensi was undone and Hashirama's spirit left this world and realm, he wished Naruto and Sasuke good luck in the future and hoped their journey would be easier than his had been.
In the Narutoverse, people's chakra possess a single elemental affinity which allows the individual to learn that specific element easier than any other, and use more powerful jutsu with that element than any other. However, due to his unique biology, Hashirama possesses two elemental affinities: water and earth. By utilizing both of these elemental affinities at the same time, Hashirama could create and control trees. He can make the trees grow rapidly from seemingly anywhere, even his own body. Hashirama could create forests instantly and even create flowering trees which pollen would fill the air and induce sleep. He also possessed the ability to heal himself without using hand seals and could bend Bijū to his will. In addition to all of this, Hashirama had great skill in genjutsu and showed the use of "Bringer of Darkness," a genjutsu that would envelop his opponent in pure darkness which robbed them of their sight.