Tsubaki was a young miko (Shrine Maiden) in training like Kikyo when she was alive. She studied under a priest at a Shinto shrine as an apprentice and she and Kikyō were rivals, sometimes battling side-by-side to defeat yōkai, Tsubaki always attempting to better Kikyō using her own holy power. While Kikyo and Kaede were traveling the countryside to visit small villages and help slay yōkai, Tsubaki laid a curse on Kikyo, telling her that as a miko she must abandon her heart, for if she ever fell in love with a man she would lose her holy powers and suffer an untimely death answered by Kikyo's cool denial. In Japanese 'Tsubaki' means camellia.
When the Shikon no Tama (Jewel of the Four Souls) was found by a taijiya, they delivered it to Tsubaki's sensei who in turn, directed them to Kikyo, as he felt she was best suited to purify it. Tsubaki, feeling betrayed by her sensei because she thought she deserved to possess the Shikon no Tama and not Kikyo, left to become a kuro miko (dark shrine maiden) and prepare an assault on Kikyo in the hope she would be able to take it from her and use it to make herself eternally young and beautiful.
Tsubaki lured Kikyo to a field and confronted Kikyo about her feelings. Tsubaki knew Kikyo had weakened considerably due to her feelings for InuYasha, and she demanded the Shikon no Tama so she could purify it in Kikyo's place. Kikyo refused and Tsubaki, enraged, cast her shikigami serpent at Kikyo. Kikyo deflected it and it struck Tsubaki in her right eye, badly scarring her face. Not long after this, Tsubaki starts to absorb weaker yōkai into her scarred eye in an attempt to regain her beauty and maintain her youth.
Much of this back-story does not appear in the manga, but is revealed in a special one-hour episode (episodes 147 & 148) of the anime titled The Tragic Love Song of Destiny. Some of the following also differs or does not appear at all in the manga.
Fifty years later, Naraku approached Tsubaki (now with white hair instead of black) and offered her the almost-complete Shikon no Tama in return for her help in killing Inuyasha and Kagome. Using her serpent shikigami, she collects a small sample of Kagome's blood and uses it to corrupt the part of the Shikon no Tama Naraku had given her and, because of their innate link, the three shards that Kagome possessed were corrupted as well and entered her body, poisoning her. Tsubaki used the shards to control Kagome's body and, while Miroku, Sango, Shippo and Kaede were away searching for the cause, Tsubaki (at the request of Naraku) forced Kagome to aim and fire an arrow at Inuyasha, reminiscent of when Kikyo sealed him to the Goshinboku (Time Tree). Kagome manages to regain some control and misses, so they set out together to find the source of the curse and eradicate it.
Meanwhile, Kikyo finds Tsubaki's lair, easily passing through the barrier she had erected. Kikyo threatened Tsubaki, telling her that she cared not what happened to Kagome but not to touch Inuyasha. It may have been due to this distraction that Kagome was not only able to overcome Tsubaki's control on her body temporarily but destroy the barrier with a hama no ya (holy arrow).
The group found Tsubaki, though they were unable to destroy her due to the curse on Kagome, which had pushed her into unconsciousness. Releasing a large white dog-like yōkai from her scarred eye, she promised Kagome's death if InuYasha drew the Tessaiga. InuYasha destroyed both the yōkai and the shikigami when it nearly kills Kagome. Tsubaki releases hundreds of yōkai from her eye, presumably a gift from Naraku, distracting the others long enough for the shikigami to regenerate and fly at Kagome. Reminiscent of Kikyo's battle with Tsubaki fifty years ago, Kagome deflects the shikigami back at Tsubaki where it struck her right eye once more. Defeated, she retreated as all her yōkai were killed off. She now only had the jewel to maintain her youth.
In the original manga, this is where one of Naraku's saimyōshō insects emerges from her eye, snatching the Jewel as Kikyo passes by and comments that someone who was felled by her could never fare well against Kagome, much less prevail.
In the anime however, this climax is instead replaced with another battle. Kagura appears to ask Tsubaki for the Shikon no Tama back but she claims she is not done with it yet. She returns to the shrine she studied at as a youth, breaking the seals on and within a tower that holds an oni sealed there long ago by the old keepers of the shrine. Using the Shikon no Tama, she absorbs the oni. InuYasha and his group are ambushed by the massive red-skinned oni Tsubaki became. After a long battle, InuYasha finally manages to destroy it with the Bakuryūha, and Tsubaki falls to the ground as she was.
Since InuYasha had destroyed both Tsubaki's oni powers and her original powers, her death was fast approaching. She began to rapidly age as one of Naraku's Saimyōshō emerges from her eye, carrying the Shikon no Tama. Proclaiming to the sky that she is the best, most beautiful miko of all, she turns into dust. After Tsubaki was destroyed by InuYasha, Kikyo comments, "Tsubaki lost because she was completely obsessed with the Sacred Jewel. Obsessed... ".