Things You'll Need
Instructions
Choose a country of origin from the Naruto world map. In Naruto, the country defines many aspects of a character's persona, including one's clan and powers. If you are adventurous, create your own country based on an existing one, keeping in mind that they tend to be named after elements, powers or resources. It would be feasible to have a "Mind" or "Darkness" nation in some remote corner of the world.
Choose a clan. For some countries this will be easy, since they have only one choice. With places like the Fire Country, however, you need to choose a clan with a set of abilities that you would like. If you create your own clan, make sure that it has a common heritage and a set of abilities that fit the name. It wouldn't be outside the realm of possibility to see a "Smith" or "Light" clan.
Choose abilities that fit the clan. The Aburame clan, for example, would only provide bug-based abilities. Remember, however, that some abilities, such as healing, are not clan-specific and can be acquired through training. Bloodline abilities can also be a source of powers that can fit outside the realm of clan background.
Create logical powers based on the ability set. Using the Jutsu Guide, you can understand how the elements are related to the powers. It would not make sense for a member of the Aburame clan to be able to create thunderbolts, but it would be totally sensible to have a shield made of their bugs. If you want to add some variety to your character, create a variant on existing power sets, like a branch of the clan that used flaming bugs instead of normal ones. No power set is complete, however, without a defensive and offensive capability. It is a good idea to think of creative ways that your power set can be used to protect or to harm.
Create a back story. The thing that makes Naruto characters so special is that they have rich backgrounds that provide motivation for their actions. Overcoming a tragedy at youth is a good story hook common to the genre. Other ideas include having a character with no memory, or a character raised by animals or a rival clan.
Flesh out your character's personality. Make sure to give him weaknesses as well as strengths. Without personal demons to overcome, no Naruto character is complete. An unflinchingly brave hero is not nearly as interesting as one who is cripplingly shy around the opposite sex, or who is manically overprotective of cats.