InuYasha is a reckless han'yō, the result of a relationship between a powerful dog demon lord and a beautiful human princess. Orphaned at a young age, and despised by both Yōkai and humans, InuYasha had a sad childhood. He is rejected by humans because of his yōkai side and looked down upon by yōkai as a "filthy half-breed" because his human blood supposedly taints his superior yōkai blood. Thus, before InuYasha met Kikyo, he found it very difficult to trust anyone, and even more to find anyone who accepted him as a han'yō.

Two hundred years later, he met Kikyo and started to attack her to get Jewel of the Four Souls to become a full yōkai. However, Kikyo, whom InuYasha developed feelings for, talked him into becoming human. Another han'yō, formerly a human known only as Onigumo, but now called Naraku, made them believe they betrayed each other. Because of Naraku's schemes, and their own lack of faith in each other, their relationship ended when InuYasha broke into Kikyo's village and stole the Jewel of the Four Souls. In defense of the village, and to keep him from escaping with the Jewel, Kikyo fired a Fuin no Ya at InuYasha, sealing him to the Goshinboku in an eternal enchanted sleep. Moments afterward, Kikyo collapses from a wound she received from Naraku -- though at first the viewer is lead to believe that InuYasha wounded her -- and dies within a few short moments. Part of her final instructions to her sister Kaede was to have the Jewel burned with her body so that it would travel to Hell with her.

50 years later, Inuyasha was released from the tree by Kagome Higurashi, the reincarnation of Kikyo from 500 years in the future, who unknowingly carried the Jewel of the Four Souls inside her body (this is due to Kikyo being burned with the Jewel, but also makes reference to Midoriko, the creator of the Jewel). When he was finished with Kumade Jōrō (Mistress Centipede), he tried to steal the Jewel but ends up with the Beads of Subjugation around his neck. When Kagome says "Sit" (おすわり, Osuwari?) his head plunges to the ground. Kagome accidentally shattered the Jewel when shooting at Shibugarasu trying to flee with it, and the shards were scattered around Japan. InuYasha, Kagome, and their friends then began the search for the shards of the Jewel of the Four Souls.

He is introduced as an antagonist when, upon his revival, he attempts to kill Kagome in order to take the Shikon Jewel. He becomes more civil as time progresses, losing some of his more "demonic" qualities and becoming much more human. He maintains a crass, blunt, rude attitude towards everyone except Kagome and Kikyo, and to a lesser degree the rest of his companions (with the possible exception of Shippo). He is brutaly honest when it comes to dealing with emotional hardships (as long as they are not his), and always tries to take the most direct route possible in solving any problem, which usually involves blowing something up or shredding it.

InuYasha is offended when someone calls him a dog or suggests that he is inferior to yōkai, due to his human parentage. However his father was such a great demon that Inu-Yasha is superior to most full-blooded demons even though his mother was human.