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Tsunade is the Current Hokage (Leader) of the Village of Konoha. Her Abilities include her incredible strength which she obtained by learning how to focus chakra into precise points and release it all at once to cause massive damage to her enemies. Her other main ability is the use of Medical Ninjutsu which is the best in Konoha.
As a child she was in a team with Orochimaru and Jiraiya with Sarutobi (The Third Hokage). She Jiraiya and Orochimaru were known as the legendary three until Orochimaru deffect from Konoha later on.
Even though she is in her fifties, Tsunade's Transformation Technique makes it appear as if she were still twenty (which Naruto calls "living a lie"). Tsunade's transformation is somewhat different from a normal transformation as it seems to be permanent, not getting dispelled when she is slashed or injured, and she apparently does not need to exert any effort to stay transformed, albeit it seems to disappear a little when her chakra runs low, as seen when she and Jiraiya were fighting Orochimaru.
Tsunade's trademark ability is her inhuman strength, which is derived from her excellent chakra control. By storing chakra and releasing it at the point of contact, she can enhance her strength to the point where she can break through boulders with her bare hands. She is also an extremely talented Medical-nin, and can heal wounds that most others would consider impossible. She went as far as to use the Shadow Seal: Release to store her chakra in her forehead to Creation Rebirth, a technique that releases the chakra to rapidly regenerate the cells in her body to heal any wound. It gives her a "immortality" in battle that even Orochimaru envied. However, because of the rapid cell regeneration, the technique shortens her life similar to the Four-Tailed transformation, however more controlled. Because of the risk associated with the technique, Tsunade has made the choice to only use Creation Rebirth in extremely desperate situations.
Additionally, Tsunade can summon Katsuyu, a giant slug that is intelligent and very loyal to her. Katsuyu is able to perform a number of jutsu for which Tsunade does not seem to have her own equivalent, such as spitting acid and spliting into smaller slugs, making her useful for accomplishing tasks Tsunade cannot.