Jizo statues can be found all over Japan, but especially around graveyards because it is believed that Jizo saves the souls of those in hell, especially aborted, miscarried and stillborn babies. According to Japanese belief, children who die prematurely are sent to Hell because they have brought so much sadness to their parents. In Hell, they are sent to Sai no Kawara, a dried up river, where they are made to build monuments made of small pebbles to Buddha in order attract his compassion and be freed from Hell. Their work is hampered however, by a terrible demon who scatters the rocks with an iron club. When the demon comes, it is Jizo that protects the children by hiding them in his sleeves and drives the demon away, making him one of the most beloved of the Bosatsu.
You will often see little piles of rocks around the statues, which were put there by parents who want to help ease the time the spirits of the children they never had will spend in hell. Most Jizo also wear red bibs or hats made by mothers who hope that by offering them to Jizo, they can encourage him to take special care of their children's spirits. Occasionally, clothes are presented in thanks for illnesses believed to have been healed through the intervention of Jizo. Temples like the Hase Kannon in Kamakura often have thousands of tiny, red-bibbed Jizo statues, put there as offerings for the souls of dead children.
Sometimes you will see Jizo by the side of the road because Jizo are also said to protect travellers and pilgrims. He is also important to firemen because it is said that Jizo descended into hell to relieve the suffering of those there by reducing the heat there.