The legend is said to originate with a young woman who lived hundreds of years ago (some versions of the legend state the Heian period) and was either the wife or concubine of a samurai. She is said to have been very beautiful but also very vain, and possibly cheating on her husband. The samurai, extremely jealous and feeling cuckolded, attacked her and slit her mouth from ear to ear, screaming "Who will think you're beautiful now?"
The urban legend picks up from this point, stating that a woman roams around at night (especially during foggy evenings), with her face covered by a surgical mask, which would not be especially unusual, as people with colds often wear masks for the sake of others in Japan. When she encounters someone (primarily children or college students), she will shyly ask, "Am I beautiful?" ("Watashi kirei?"). If the person answers yes, she will take off her mask and say, "Even like this?" At this point, if the victim answers "No," she will slay them (in many versions, her weapon is a pair of scissors). If the victim tells her she is pretty a second time, she follows the victim home and slays them in their own doorway, due to the fact that "kirei" (きれい), Japanese for 'pretty,' is a near homophone of "kire" (切れ), the imperative form of "to cut".
During the seventies, the urban legend went that if the victim answers "You're average", they are saved. When the urban legend was revived around 2000, the answer that would save you was changed to "so-so," with the change that this answer causes the kuchisake-onna to think about what to do, and her victim can escape while she is in thought.
Urban legend and public panics
During the spring and summer of 1979, rumors abounded throughout Japan about sightings of the Kuchisake-onna having hunted down children. She is reported to be able to run 100 meters in 3 seconds -- chasing and disfiguring young children. It's also been reported that Kuchisake onna can be distracted by throwing fruit at her, leaving the intended victim with just enough time to make his or her escape.
In October 2007, a coroner found some old records from the late 1970s about a woman who was chasing little children, but was hit by a car, and died shortly after. Her mouth was ripped from ear to ear. It is believed that she caused the panics around that time.
In 2004, a similar legend spread throughout cities in South Korea of a red-masked woman, though this may have been fueled by tales of the 1979 cases in Japan, as well as a 1996 Japanese film (see below).
Similar version - "Kuchisake
It is a dark and dreary night.
Cruising down a deserted
country road, a lone driver rubs his eyes and fights to stay awake.
car takes a turn, a beautiful woman hails from the side of the road.
wearing flowing white. The driver, entranced, pulls by the side of the road to
give the woman a lift. As she approaches the car he sees that her eyes are
stunning, her body, lithe and graceful, a true beauty.
The lower half of her
face is draped with a white cloth.
After slipping into the back seat and
waiting for the car to resume its journey, the woman asks the man, "Am I
He answers, "Yes, you are beautiful," his eyes flicking toward
the rear-view mirror to catch a glimpse of his passenger's face.
As he does
so, however, she pulls the cloth from her face, revealing a horrible gash of a
mouth, sliced from ear to ear, with a red tongue twisting in it's
Through the driver's subsequent screams, all that can be heard is "Am
I beautiful? Am I beautiful? Am I . . ." repeated over and over again.
The 1996 film Kuchisake-onna gives the legend a modern origin as the result of a plastic surgery gone horribly awry. Many anime series refer to the legend as well, often in throwaway lines. This is especially true for anime made in the 1980s, when the 1979 reports were fresh in people's memories.
Several kuchisake-onna appear in the manga and anime series Hell Teacher Nūbē.
An episode of the anime Ghost Stories featuring the character was initially scheduled to air on November 5, 2000, but the episode was discontinued when many people complained to Fuji TV because they thought the facial feature looked like cleft palate. 
Hideo Yamamoto's manga Ichi the Killer features a yakuza enforcer named Kakihara with a similar disfigurement.
There is also another Japanese film adaptation, "Kuchisake Onna" directed by Kôji Shiraishi, released 17 March 2007 in Japan that deals with the slit-mouthed spirit seeking victims with a pair of scissors.
Kuchisake-Onna was also the basis for a pink film's plot of the same name.