The major difference between Sunnis and Shiites has to do with the succession of Muslim leadership after the death of the Prophet Muhammad.
When Muhammad died, a council met to select his successor as leader of the Muslims. The council selected Abu Bakr, who was a close friend of Muhammad and father of his second wife. However, there was a group of Muslims who believed that only a blood relative should succeed Muhammad. They favored Ali, Muhammad’s cousin and husband of Muhammad’s daughter Fatima. The Shiites are named for their adherence to the cause of Ali.
Since then, other distinctions have arisen. The Shiites revere imams as saints, the Sunni see this as edging towards polytheism. The Sunni believe that traditional accounts of the actions and beliefs of Muhammad are a source of religious authority while Shiites look only to the Koran. However, the basic beliefs of Islam are common to both sects.