The Terrible Oni is a large demon who lives in The Islands in a huge volcanic lair named The Terrible Oni's Volcano.
This is the

evil creature Grandmaster Sensei has trained you to defeat over your time in The Islands. The Terrible Oni's chamber within the Volcano is a large stone.

The Terrible Oni seems to be made out of Volcanic magma in the shape of a humanoid with two horns and a small amount of what seems to be hair on his head. His feet are oddly shaped like clogs. He wields a large knife which attacks a platform leading up to a switch; pulling this switch helps the Sensei's Flame-Throwing cat reach Oni who will help you defeat him.

When fighting The Terrible Oni, he will squat and try to strike you with his giant blade on the second wooden platform up (keep in mind this is the only place he can hit you with it). Then he will stand up and shoot a stream of volcanic rocks towards the switch from his mouth; he will repeat this pattern over and over until you have defeated him with the flame-throwing cat. His rocks, other than killing you, are also intended to strike the switch and push the flame-throwing cat further back (though usually not by much). When defeated, a mass explosion caused by the Cat's magnetic key blows up The Terrible Oni, revealing a bridge to the level's end. If you look closely, you can see the Terrible Oni's skeleton or fossil (you can see it before you kill him, but only when he is crouching). If you collected all the items in the level, you can get him as a prize