An enigmatic, powerful and fashionable sorceress, she is one of the main characters in xxxHolic and a very important person in the storyline of Tsubasa: Reservoir Chronicle. She is known by many names throughout the multiverse, most notably as "The Dimension Witch" —a title that reflects her unique reach in time and space. She has also been called The Far Eastern Witch as one of her aliases. However, she also claims that her name, "Yūko Ichihara", is just an adopted name, meaning her true name is unknown. The "侑" character of Yūko's first name translates as "to help, assist, repay kindness," coinciding with her roles as wish-granter and Watanuki's mentor.
In the story, her role is not a leading one but not less important, in relation to the plot that develops between the different "worlds" that the characters visit. Yūko is apparently one of the few people with the power to send people to multiple worlds; as the Witch of Dimensions, she informs Syaoran and company what awaits in this quest of collecting feathers Sakura's feathers, and maintains her rule of exchanging something important from each character, a price to pay for their wish of travelling dimensions. She sends the travelers the White Mokona (Soel), which acts as both the party's dimension transporter and interpreter; additionally it serves as an intercom between Yuko and the party, it also helps monitor the places where they are; grant requests and exchange payments, such as the dress Sakura made for her and the Chocolate Lava cake they had in Outo country. Later on, when seeing Syaoran's past it's seen that although she may seem cold Yuuko's actually been concerned with Syaoran, Sakura, Fye and Kurogane for the fate that the three have had and have to go through.
Her appearances in the earlier volumes of the Tsubasa: Reservoir Chronicle manga were very limited and often with comedic effect, such as teasing Kurogane (much to his annoyance). After the incident in Tokyo Country, Yūko became pivotal in explaining the challenges that the cast will face. When Sakura had a dream that Fay would kill her, Syaoran, Kurogane and then turn on himself, she traded her luck for advice from Yūko. Yūko was also aware of Fay's curse from the beginning, thus her appearing in a different dimension when the Tsubasa group first met in the 1st volume of the manga.
As both the Tsubasa manga and xxxHolic manga progresses Yuko makes very subtle hints of Watanuki's later significance to Syaoran and their story, stating that she may know more of what fate lies between Watanuki and that of Syaoran.
By the time the Tsubasa Reservoir Chronicle group returned to Nihon Country (Kurogane's world), she was able to explain the real truth about Sakura being a cloned soul. By chapter 183, she granted the teams' wish of returning to Clow Country in which she, with the help of Black Mokona(Larg), used a magical string to connect Syaoran's group to Clow county. The price for them to return to that dimension had already been paid by Watanuki with his memories. Fei Wong Reed, sensing her powers, sent a lightning bolt to stop Yuko, seriously injuring her in the process. However, she was able to complete her task. At this point, she explained to Black Mokona that there is nothing more she can do for Syaoran and that the rest is up to those children to choose their fate.
Tsubasa Reservoir Chronicle chapter 189 revealed that Yūko had received payment from Sakura Li (Sakura Kinomoto's Star Staff) to allow her son (the original 'Syaoran') to travel to Clow Country to meet with Princess Sakura. She returns 'Syaoran' after his father, Syaoran Li made a wish that he should return safely. However, 'Syaoran' makes a wish to return to Clow Country. Yūko reveals the price to be that 'Syaoran' would be unable to return to Japan as long as there is nobody who can cross dimensions in Clow Country. 'Syaoran' agrees to the price and Yūko sends him off.
In xxxHolic chapter 174 she is seen in Watanuki's dream fading away. Afterwards Watanuki realizes he can no longer meet Yuko.
Syaoran's choice to take Sakura's hand also causes someone else with her same fate to be called back to death. The person who had suffered the same fate as Sakura was in fact Yuko. Then she's brought to Clow Country.
In Chapter 215, Yuko appears in Clow Country. She tells Fei Wong his dream cannot be fulfilled. It's later revealed that Yuko created the shop in order to protect the tube (a world of its own), that contains Syaoran's parents; who rewound their own time to save their children (Syaoran and Kimihiro). Yuko, now in the verge of death, breaks open the tube, releasing both Sakura Li and Syaoran Li (the clones) who are Syaoran's parents.
In Chapter 177 of XxxHolic, after Watanuki sees the events taking place in Clow Country, he starts calling for Yuko. Watanuki notices that the people who met Yuko do no longer remember her.
Among her other abilities beside granting wishes, transversing dimensions, she can also create gods for other worlds (which was a wish made by Ashura of Tsubasa), manipulate time (demonstrated when she had Mokona transport the Tsubasa group from Shara to its ancient past of Shura), and speak through Maru and Moro as well through other people's minds. In the anime, when she sends a letter to Watanuki, her responses to him are in "real-time", depending on Watanuki's reaction. In the xxxHolic movie, she gives a glimpse of how powerful she can be when she faces the Collector, even though she does not use any offensive attacks. She effortlessly dodges most of his attacks and is seemingly unscathed from a direct hit.
All of Yūko's customers must pay such prices in order to grant their wishes, which can be no more or no less than the one demanded, or else harm will come to one's way. She is not one to tell the customer the most direct way to solve their problems because in the end, it can only be solved with that person's own realization and resolution to change themselves. Often if the person lacks the sincere determination to change themselves, an ironic disaster -that even Watanuki, who wishes to stop them from hurting themselves, cannot stop- will inevitably befall them.
Her abilities are not without limits and may almost seem a curse as it appears that she is unable to do anything for anyone or grant any gift (other than feelings) without it becoming a binding transaction.