The Yamata-no-Orochi is a massive eight-headed serpent that dwells at the bottom of a lake in the forest of Ryugenzawa. To all appearances, it is the basis for the popular Japanese myth of the Orochi, a giant serpent that terrorized the countryside until the god Susano-oh lured it into a trap using bottles of sake and beheaded it.
How the Orochi ended up in the bottom of a lake is unknown. It is known that the area used to be a zoo, however. The magical Moss of Life that grows on the largest head of the Orochi does something to the water of the lake, causing the vegetation and animals that thrive on it to rapidly grow to gargantuan proportions. This destroyed the zoo, driving away everybody but the old caretaker and his grandson. They remained as custodians of the forest, keeping the giant animals in check and watching for any signs of the Orochi stirring in his sleep.
The Orochi doesn't really have a personality, being more a beast driven by instinct than possessing any intelligence. It is attracted to young women and alcohol. It reacts to threats by attacking them, and it finds the taste (and smell) of men disgusting.
The Orochi is a huge beast, with strength in proportion to its size. It has seven smaller heads and a single far larger head from which the other necks grow, all of which can breathe flame. While visually impressive, the Orochi is not that much of a threat to a skilled martial artist unless sufficiently enraged.