The key difference between the two sects originates from the question of who should succeed the Prophet Muhammad (PBUH) as leader of the developing Muslim community after his death.
While Sunnis believe that Abu Bakr, the father of Prophet Muhammad (PBUH)’s wife Aisha, was chosen by a few people as the first caliph (Muslim ruler), Shiites believe that Ali, the Prophet’s cousin and son-in-law, was ordained by Allah (SWT) to be the successor of the Prophet. This was declared by the Holy Prophet to all Muslims by the Pond of Ghadeer upon return from his last pilgrimage (Hajj) to Mecca.
Furthermore, Shiites believe that second to the Prophet Muhammad (PBUH), Ali and his descendants were the most divinely inspired men; free from human error and sin, with a flawless understanding of Qur’an and its inner meaning.
Source: Aululbayt TV