Kanako's parents abandoned her at an early age, leaving her to be adopted by the Urashima family. She bonded with her step-brother, Keitaro, and the two promised to run their family inn together. Kanako gradually grew to love Keitaro, but he was obsessed with a girl from his childhood and never noticed her affections. After finishing high school, Keitaro obsessed over his studies and later on moved out to become the landlord of Hinata Inn on his own.
Three years later, the now 17-year-old Kanako moved into Hinata Inn, now an all-girls dormitory. Her appearance coinciding with Keitaro's travels to America. Kanako's arrival went unseen by the tenants, with her disguising herself as each one of them and doing bizarre things like sexual harassment and antagonising the girls. She eventually reveals herself as Keitaro's sister and takes over Hinata House.
The girls all react negatively to Kanako's oppressive brand of management, all of them conspiring to get back at her. Naru, however, decides to take a more compassionate route. She talks to Kanako and finds out that she loves Keitaro, but because they're not really related she doesn't feel guilty about persuing him. Kanako, with Naru in tow, fight all the Hinata girls to a draw, determined to find the one girl that Keitaro has dedicated his life to. Naru, knowing that she is the only girl who would be the right age, confesses that she is the one. Kanako, feeling betrayed, is about to exact her vengeance, when the girls are nearly run over by a van. The driver climbs out and lo and behold, it's Keitaro.
Keitaro and Kanako become reacquainted, though Keitaro can't figure out that his sister is attracted to him. He frequently tries to get a moment alone with Naru, but Kanako and the other girls refuse to leave them alone. Keitaro then tells Naru to meet him at the abandoned annex. Naru, still feeling guilty over what she said to Kanako, sends her instead, knowing that Kanako appreciates Keitaro more than she ever could. When she asks Haruka, the previous landlady, about the annex, she tells Naru that it has the ability to bind two souls together for all time. Realising that she was leading Keitaro into a trap, Naru arrives just in time to see Keitaro confess his love to Kanako, mistakenly believing her to be Naru in the dimly-lit room. The spell takes effect and Naru is repelled from Keitaro.
Naru tries to get to Keitaro, but is repelled at every turn. Keitaro also tries to resist, but Kanako's will tests the both of them. The love triangle takes their conflict across the entire city, culminating in a moment of life and death as Keitaro is thrown off a cliff from the spell's backlash. Naru jumps after him, realising in that moment that she loves him with all her heart. This is enough to break the spell and destroy the annex. The two grab hold of a nearby branch and safely land on a sandy outcrop. Naru, in hysterics, confesses her love and kisses Keitaro.
Afterwards, it is revealed that Keitaro and Naru's love confession has made the other Hinata girls realise their own feelings for Keitaro. They team up with Kanako and chase the couple to an island in the Pacific. Each girl tries her hand at wooing Keitaro, only to find that his love for Naru is far too strong at this point. Kanako and the others all concede defeat and allow the two to pursue a relationship. Kanako is last seen with their grandmother travelling the world before returning for Naru and Keitaro's wedding.
Kanako has learnt from a young age how to impersonate people, using an array of masks, costumes and voices to disguise herself. Her ventriloquist skills are so good that she can make it seem as if her pet cat is talking.
Kanako has also mastered ninjutsu and Urashima-style martial arts. She can manifest all of her chi into a dark flame around her hands that is capable of breaking rocks.
Kanako's greatest assest is her intelligence. She can manipulate her own enemies into working for her in a similar manner to Tobi from Naruto. She has great insight on both the history of Hinata Inn and its tenants, playing on their insecurities for her own amusement