- "Forgive me... for leaving you alone... Your friends... Keep friends... those you love... close to you..."
- ―Iwao's final words to Ryo.
Iwao is a man of high morals who respects devotion to one's convictions, proper manners and above all, trust. He is very calm and composed, personifying simplicity and courage.
His only hobby is calligraphy which he often uses when writing letters and postcards.
As a master of martial arts, he is strict and is never satisfied with relying solely on one's natural talent. He has continued to adhere to a strict training regimen throughout his adult life. Although his son Ryo sometimes rebels against his strictness, he still respects him as a mentor and dreams of becoming like him.
About 20 years before the series, Iwao went to China in search of martial arts, and befriended Kai.
He is held in high regard within the community because of his devotion to the martial arts.
Not much is known about Iwao's wife except that she died when Ryo was quite young.
While Iwao is in the dojo with Fuku-san three men break in the dojo, two wearing black suits, and one wearing traditional Chinese clothes, Lan Di, who approaches him. Fuku-san is thrown out of the Dojo as Ryo turns up and is told by Iwao to stay back. Lan Di asks Iwao where the "mirror" is. Iwao refuses to tell him. Iwao attempts to attack Lan Di but he is quick to dodge and knocks Iwao to the ground, Ryo tries to help but is also knocked down. Lan Di threatens to kill Ryo if Iwao doesn't give him the "mirror", so Iwao is forced to respond. The men in black suits retrieve the "mirror" then Lan Di asks Iwao if he remembers Sunming Zhao and states that's the man Iwao killed in Mengcun.
Iwao struggles to get up then once he gets up, Lan Di delivers the death blow. The men in black suits return with the Dragon Mirror and with Lan Di they leave the Dojo. Iwao dies in the arms of his son Ryo telling him "Forgive me for leaving you alone. Your friends, keep friends, those you love, close to you".
Since then, Ryo has sworn vengeance on Lan Di for Iwao's murder.
Later it is revealed that when Iwao was young he traveled to China to undergo martial arts training and met many people, and brought back the Phoenix and Dragon Mirrors from there. Iwao was fascinated with the Chinese martial systems and wanted to learn several kung-fu techniques into the Hazuki style.
Yuanda Zhu says that Iwao murdered Sunming Zhao (the man Lan Di asked about) accidentally in Mengcun, and that is the reason Lan Di hates him and went to kill him. Although, Zhu believes that it happened, and it could not be true.
- Ryo Hazuki (son) - Ryo is a son of Iwao Hazuki. His death by the hand of Lan Di, became avenged by his son and
- Lan Di (rival) - Lan Di avenges his father's death, fought Iwao and kill him in the beginning of the game.
- Summing Zhao - Iwao killed Zhao in Meng Cun and stole the dragon mirror. According to Yuanda Zhu, Lan Di swears vengeance for his father's murder.
- Iwao was murdered on November 29th, 1986 which is Ryo's birthday.
- Iwao zodiac sign is Taurus and he has a A blood type.