Kusanagi-No-Tsurugi, also known as Grasscutter, Murakumo-No-Tsurugi, Sword of the Gods or Sword-of-the-Village-of-the-Clustering-Clouds, is a legendary holy sword in the Usagi Yojimbo series which is the central object in the Grasscutter arc and the Grasscutter II arc.
The sword was first found in the fourth tail of the Eight-Forked Serpent of Koshi by Susano-o, the kami of the sea-plain and dubbed it "Murakamo-No-Tsurugi" As he was banished from the heavens because of an insult towards Amaterasu, Susano-o presented the sword to her to appease her anger.
Years later, at the temple of Amaterasu, Yamato-Dake, the son of Emperor Keiko received the sword alongside some fire strikers as favors to aid him in quelling the Yemishi. Yamato then went to the Suruga province, where a lord offered to organize a hunt for him, which he accepted. Once outside however, the lord had the intention to assassinate the young prince by setting the grass around him aflame. Yamato began cutting back the surrounding grass using "Murakamo-No-Tsurugi", when he realized that the wind blew in the direction the sword was swung. He then set his own fire using his fire strikers and swung the sword in the direction of the traitor, killing him and his men. Once the fire died out, Yamato-Dake renamed the sword "Kusanagi", or "Grasscutter".
Later on April 25, 1185, after the Heike clan lost the final battle of the Genpei War, Kusanagi was lost to the sea. It was the only sacred item besides the Sacred Mirror and Jewel that was not recovered from the aftermath. A forged duplicate of the sword was put in Atsuta Shrine.
Centuries later, a group of Heike clan sympathizers naming themselves "The Conspiracy of Eight" began a plot to reinstate the Emperor into power by recovering Kusanagi to be presented with the two other sacred items; this would give the idea that the gods wanted the Emperor back in power. The leader, Lord Kotetsu employed a woman named Ryoko who had supernatural powers. Using her abilities, she was able to control the Keike crabs in the ocean to locate the lost sword, in which they were successful.
Unfortunately for the conspirators, Miyamoto Usagi came across the sword. Initially thinking of it to be a fake, he took the sword anyway to present to Lord Noriyuki as a gift. Consequently, he was continually pursued by the conspirators' men, until Ryoko's personal servant, Kitanamono took the sword from him. Unfortuntely for Kitanamono, however, Jei - The Blade of the Gods was also pursuing the sword after it (allegedly) summoned him. Unsurprisingly, the feral servant was killed. Jei then attempted to consecrate Kusanagi; much to his surprise, the sword did not change - unlike other weapons.
Not long afterward, Usagi and Gen crossed paths with Jei, who stated that the sword would be a trophy for the victor. Jei stuck Kusangai into the ground, apparently creating an earthquake. After losing his sword during the fight, Usagi used Kusanagi to run the sword through Jei's body, destroying it. Sanshobo and a group of priests brought Usagi, Gen and Kusanagi to his temple, where they devised a plan to deliver it to Atsuta Shrine.