Kotarou Katsura is the leader of a moderate Joui faction and a fugitive wanted by the authorities. He was a former comrade of Gintoki Sakata during the Joi War, a conflict fought to resist the Amanto takeover of Japan. Even after the war, Katsura continues to resist the Amanto, amassing a band of followers and becoming a prominent figure in the anti-government movement. Due to his involvement in terrorist activities against the Bakufu, he is constantly on the run and is highly proficient in the art of escape and the use of explosives. His character is based on the historical figure Katsura Kogoro.

Katsura is characterized by a complex mixture of idealism, naivete, and deep conviction. He presents a serious and elegant exterior, which contrasts sharply with his absurd and often outdated sense of humor. He has a strong tendency toward dramatic storytelling, which frequently moves his listeners to tears, with the notable exception of Gintoki. He is famously persistent and possesses a strong sense of pride in his name, insisting on being called Katsura rather than the popular nickname Zura, correcting anyone who makes this mistake regardless of the situation. Despite his role as a serious revolutionary, he often engages in silly behavior and takes on odd jobs to fund his activities.

Katsura's primary motivation is to liberate Japan from Amanto control. Initially, his methods were extreme and violent, involving bombings and direct attacks. As the series progresses and he forms deeper connections with the people of Edo, his motivations evolve significantly. He grows to believe that the country should be changed through diplomatic and peaceful means, without causing unnecessary sacrifice. His goal shifts from pure destruction to meaningful reform, seeking a way to incite change that protects the people he cares about.

Katsura acts as a major supporting character and a key member of the Joui faction. He serves as an ideological foil to both the radical Shinsuke Takasugi and the detached Gintoki. His actions frequently set major political events in motion, and he is highly respected by his followers, who refer to him as the Daybreak of the Joui Faction. When people believed he had died during the Benizakura arc, even other terrorist groups sought vengeance, proving his influence.

The central relationship in Katsura's life is with Gintoki Sakata. They fought alongside each other in the Joi War and share a deep, brotherly bond marked by mutual respect and frequent comedic conflict, particularly over his nickname. His relationship with Shinsuke Takasugi is more tragic, as they were once allies who drifted apart due to their opposing ideologies, with Takasugi embracing destruction while Katsura seeks a path to peace. Katsura also develops feelings for Ikumatsu, a local ramen shop owner, revealing a softer, more vulnerable side.

Katsura undergoes significant development throughout the series. He evolves from a ruthless terrorist focused on destruction into a pragmatic leader who values life and aims for peaceful reform. By the conclusion of the series, he successfully transitions from a fugitive revolutionary to a political leader, becoming the first Prime Minister of a renewed Japan and achieving his long-held goal of bringing about change.

In terms of abilities, Katsura is a formidable combatant proficient in guerilla tactics. His signature weapon is a metallic grenade, and he is an expert in the use of explosives. He is also a master of evasion, earning the title Runaway Kotarou for his consistent ability to escape from the Shinsengumi and other perilous situations. He is skilled in disguise, frequently adopting personas such as Space Captain Katsura, although his disguises are often comically ineffective at hiding his true identity.