Because of their adherence to strict codes of secrecy, very little is known about the early Ninja or their origins. It is surmised that they originated in Japan during the Heian Period, during a time of fierce rivalry and warfare between Japanese Daimyo, or Feudal Barons. Japan has always had a strict code of military etiquette, later known as the code of bushido, or "the way of the warrior." According to one explanation, the Ninja were originally Bushi Warriors who had broken this code by, for example, abandoning a sword in battle. Rather than face disgrace among their companions, they fled to the remote mountains around Kyoto, where they formed bands of mercenaries and bandits. In fact, unlike the Samurai, who developed complex rituals concerning their treatment, the Ninja had little respect for their swords, which they regarded as just tools of their trade.

In the mountains the renegades encountered the Yamabushi, ascetic Buddhist Mystics who practiced a severe regimen of Martial Arts exercises. In the neighboring countryside, many stories were told about the Yamabushi; they were alleged to have the power of flight. The mystical teachings of the Yamabushi may account for the Ninja's own mystical philosophy. These teachings also account for the legends of Ninja’s with superhuman powers, and another legend that claims the Ninja are descended from Tengu. Mythological long-nosed masters of the Martial Arts, who had the power to change themselves into birds.

By the end of the Ninth Century, China was plunged into a series of violent civil wars and the T'ang Dynasty (618-907) began to crumble. Many of its leading generals fled to Japan, finding sanctuary in the same region around Kyoto. There they met the Yamabushi, and taught them the mystical and military traditions that had been prevalent in T'ang China. They may have introduced Sun Tzu's Art of War, which was the basic text in Chinese military schools. These teachings eventually reached the renegade Bushi living in the region, which incorporated and modified them according to their own needs.

These Bushi, Yamabushi, and Chinese refugees began to form their own communities, where they were joined by Japanese peasants fleeing the excesses of greedy Daimyo. The Martial Arts styles and unique religious code were passed down to younger generations; both boys and girls were trained from early childhood in the Martial Arts and survival techniques. Although the most basic skills were passed down through the family, community schools were soon organized so that all the children of a village would have access to the same skills.

It is unknown when local military leaders first began to employ Ninja as spies and assassins. Spying in Japan dates back before the time of the organized Ninja to the reign of the Empress Suiko (593-628). In that time, Prince Shotoku Taishi was at war with the Daimyo Moriya over possession of a strip of land. Prince Shotoku won the war, largely because of the efforts of a certain solider that spied on Moriya and supplied valuable information about his troops. The Prince rewarded him with the title Shinobi, which means "steal in." The Japanese character for Shinobi is also pounced "nin," and it later formed the first character of the word Ninjutsu. Spies were also used by the Japanese warlord Minamoto Yoshitsune to overthrow the powerful Taira family.

The Ninja were especially active from the Ashikaga Period (1333-1568) to the early Tokugawa Shogunate Period (1603-1868). In Japan, the exploits of famous Ninja are legendary. One story tells how Japanese Warlord Oda Nobunga sent a Ninja dwarf to assassinate his rival Kenshin. Kenshin, realizing that his life was in danger, had surrounded himself with loyal troops at all times. After much thought, the Ninja finally discovered the one place where he would find Kenshin alone: in the toilet. For many hours he hid hanging under Kenshin's personal toilet, waiting for him to make his appearance. When Kenshin finally sat down, the Ninja shoved a spear into his anus with such force that it came out of Kenshin's mouth. Even Oda Nobunaga was terrified of the Ninja. He sent an expedition against them in 1579 and was soundly defeated. In 1581, realizing that he could not destroy them by conventional means, he sent out a second expedition against the Ninja, attacking their villages and massacring their women and children. The Ninja were outnumbered ten to one, and many Ninja families were wiped out. Nevertheless, the survivors were able to regroup. They played an important role in the rise to power of Tokugawa Ieyasu just twenty years later.

Another story illustrates how Ninja were able to escape from precarious situations. A Ninja, sent to assassinate Tokugawa Ieyasu, was caught by one of Tokugawa's own Ninja. The two Ninja were old friends from the training school and the captured Ninja was able to convince his friend to bring him before Tokugawa. Rather than have him executed immediately, Tokugawa agreed that the captured Ninja could commit suicide in front of him; he knew that Ninja were trained to kill themselves when captured. The Ninja took out his sword and stabbed himself, blood gushed out, and he fell lifeless to the ground. As a final disgrace Tokugawa ordered that the Ninja's body be thrown in the moat surrounding the palace. That night, many of Tokugawa's guards were mysteriously killed. At first it was thought that there was a traitor in the palace, but later the truth became known. Shortly before his capture the Ninja had killed a fox and hid it in his clothing around his stomach. When ordered to kill himself, he actually cut the fox's body, not his own, and feigned death. Once he was thrown in the moat, he was easily able to escape.

The Tokugawa period was a relatively peaceful time for Japan. There was little need for highly trained assassins and spies. Some Ninja abandoned their trade and became farmers. Some became legendary bandits, not unlike Robin Hood in Western literature. Many others joined the Police force, for which they were highly trained. Some Ninja were still used by the Japanese authorities as spies against Korea, China, the Americans, and European powers that were attempting to penetrate Japan; one actually stole documents from one of Commander Matthew Perry's ships. The last Ninja who actively applied his trade was Fujita Seiko, who served under Emperor Hirohito during World War II. There are still Ninja training in Japan and, more recently in the West. The person most responsible for spreading Ninjutsu to the West is Hatsumi Masaaki, who opened his Ninja Ryu (school) to students from the United States, Europe, and Israel.