We introduce the Illustris Project , a series of large-scale hydrodynamical simulations of galaxy formation . The highest resolution simulation , Illustris-1 , covers a volume of ( 106.5 { Mpc } ) ^ { 3 } , has a dark mass resolution of { 6.26 \times 10 ^ { 6 } { M _ { \odot } } } , and an initial baryonic matter mass resolution of { 1.26 \times 10 ^ { 6 } { M _ { \odot } } } . At z = 0 gravitational forces are softened on scales of 710 { pc } , and the smallest hydrodynamical gas cells have an extent of 48 { pc } . We follow the dynamical evolution of 2 \times 1820 ^ { 3 } resolution elements and in addition passively evolve 1820 ^ { 3 } Monte Carlo tracer particles reaching a total particle count of more than 18 billion . The galaxy formation model includes : primordial and metal-line cooling with self-shielding corrections , stellar evolution , stellar feedback , gas recycling , chemical enrichment , supermassive black hole growth , and feedback from active galactic nuclei . Here we describe the simulation suite , and contrast basic predictions of our model for the present day galaxy population with observations of the local universe . At z = 0 our simulation volume contains about 40 , 000 well-resolved galaxies covering a diverse range of morphologies and colours including early-type , late-type and irregular galaxies . The simulation reproduces reasonably well the cosmic star formation rate density , the galaxy luminosity function , and baryon conversion efficiency at z = 0 . It also qualitatively captures the impact of galaxy environment on the red fractions of galaxies . The internal velocity structure of selected well-resolved disk galaxies obeys the stellar and baryonic Tully-Fisher relation together with flat circular velocity curves . In the well-resolved regime the simulation reproduces the observed mix of early-type and late-type galaxies . Our model predicts a halo mass dependent impact of baryonic effects on the halo mass function and the masses of haloes caused by feedback from supernova and active galactic nuclei .