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This article, Hiding in Mist Technique, contains content taken directly from our mother site. All credit of such content is reserved the original authors over at Narutopedia, the original article can be read here: "Hiding in Mist Technique".
This displacement technique is a speciality of the ninja from Kirigakure, where one causes a mist to spring forth by lifting up some water, then goes in it and out of sight at will from within the pearly-white realm. The mist's thickness is controlled by the amount of chakra kneaded into it. It can't fool the Byakugan, but, due to the mist being created with the user's chakra, any Sharingan-user will see the mist colored by their opponent's chakra, which will effectively hide the user from the dōjutsu. Especially skilled users, such as Zabuza Momochi, were able to use this technique without a nearby water source.
Fanon-Canon Variant[]
Hiding in Mist Technique was evolved with the introduction of the Demonic Brothers as they can turn their whole bodies into the mist or produce mist that actually is really dark and blinds sensor types as it hides the Demonic Brothers Chakra and makes their attacks more unpredictable as most cannot see through it and in order to see through it they had to enhanced their sight with chakra and they did this without water nearby.