Because his mother died when he was very young,[14] Kakashi was raised during his early years by his father, Sakumo. Sakumo was famed throughout the shinobi world, having saved Konoha on at least one occasion; Kakashi in particular revered his father. During one of Sakumo's missions - after Kakashi was enrolled in Konoha's Ninja Academy - Sakumo made the decision to save the lives of his teammates rather than complete the assignment. The mission's failure had disastrous consequences for the Land of Fire, causing many in Konoha, including the teammates he saved, to vilify him for abandoning his duties. Disgraced, Sakumo committed suicide. Seeing what his father went through and determined not to make the same mistakes, Kakashi decided that following the Shinobi Rules must always take priority.

Because he'd lost two teammates in such a short timespan, his role in Rin's death, and his failure to honour Obito's last request by protecting her, Kakashi dropped into a depression. In the anime, many believed he purposely killed Rin to prevent her from leaking information, earning him the nickname "Friend-Killer Kakashi". Many, especially those in Anbu believed he would kill a comrade without hesitation if it was for the sake of completing the mission. He would also spend his days avoiding friends and former classmates and at night he would be haunted by dreams of himself killing Rin again.

Minato, now the new Hokage, tried to help Kakashi emerge from the darkness he'd fallen into after Obito and Rin's deaths by assigning him to the Anbu in order to have him close in an attempt to alleviate his pain.Kakashi did well in the Anbu, eventually becoming a captain and the leader of Team Ro. However, his successes were owed to his cold behaviour and his ruthlessness in combat, signs that he was still upset by Rin's death. Minato therefore tried a different tactic: assigning Kakashi to protect Minato's wife, Kushina Uzumaki, during her pregnancy. Kakashi carried out his duties faithfully, monitoring Kushina from the shadows whenever she left her home.During his time off, he would visit Rin's grave and Obito's engraving to tell them his regrets and how life was going without them.

Since his early childhood, Kakashi was very independent and self-confident, at times even appearing arrogant and condescending. Despite that, Kakashi was very perceptive and intuitive, quickly realising the situation for what it was. After his father's death, Kakashi became more stern, aloof and cold toward others, following all the rules to the letter, chastising any who disobeyed them and being willing to abandon his comrades to finish missions. As an adult, Kakashi typically has a relaxed and almost bored attitude, not prone to getting too worked up about anything or by anyone. Despite his increasingly growing reputation and prowess as a ninja, Kakashi has shown no signs of arrogance, and is rather modest about his abilities. He is habitually tardy, showing up when it suits him, using excuses that convince nobody, and later leaving for equally poor reasons. Though Kakashi wants others to believe this is how he always acts, he only does so for matters that aren't of particular importance.

In truth, Kakashi is rather a solitary and matter-of-fact person. Kakashi is still just as apathetic as he was during his youth, often speaking bluntly about sensitive topics and occasionally ignores his fellow classmates, whenever he passed by them. He is alone for most of his spare time, spending hours visiting Rin Nohara's grave or the Memorial Stone where Obito Uchiha's name is engraved. He tells them about his life, recent events in Konoha, and others they knew, but mostly he shares his regrets that they cannot be with him or that their deaths were his fault. In the anime, after Rin died, Kakashi went through a period of post-traumatic stress disorder, having nightmares about her death and growing depressed whenever others mentioned her. Over time, Kakashi comes to accept that Rin chose to die, so his guilt instead became more about his broken promise to Obito to keep Rin safe. This fact causes Obito's apparent death to weigh more heavily on him, compounding the regret he feels about what his personality was even hours before Obito seemingly died. Kakashi feels that, had he cared about teamwork and friendship in the same way that Obito did, Obito's "death" might have been avoided. Thinking it would ease his pain, Minato convinced Kakashi to join the Anbu. During his time in the Anbu however, Kakashi gained a reputation for his cold-bloodedness. As noted by Kurenai Yūhi, Kakashi suffered with suicidal thoughts during his Anbu career, with his reckless fighting style and lack of self-care being deemed as Kakashi being in a hurry to die.