Gaara - Complete the Story Mode in hard difficulty.
Gai - Complete the Story Mode without using any continues.
Itachi - Complete the Arcade Mode with all initially available characters.
Jiraiya - Beat Arcade mode with Tsunade
Kyubi Naruto - Complete the Arcade Mode with Itachi.
Orochimaru - Beat Arcade mode with Jiraiya
Sasuke Cursed Seal 2 - After unlocking everyone else, complete the Arcade Mode with Sasuke, once again.
Temari - Complete the Story Mode in normal difficulty.
Tsunade - Unlock Gai, Temari, and Gaara and you will unlock her. (Beat Story on Normal/Hard, and beat without losing continues)
Submitted by kooleokid, jojsk, Gaara8, ziatier, J-Mas