Muramasa is a famed blacksmith within Ise Province. Legend says that he has forged a demon sword that antagonizes the Tokugawa clan. There were stories about his Katana that killed Tokugawa Ieyasu's grandfather, there's also one that Nobuyasu used to commit suicide, and there’s also one that actually cut Ieyasu himself.
Muramasa claims that he is not qualified to be a Heroic Spirit because as a blacksmith, he lacks the heroic deeds necessary to make him a hero. It is for that reason he is manifested as a Pseudo-Servant in a suitable human body. It is unknown if he is a Heroic Spirit Candidate, Wraith, Phantom, or some other subset of spirit.
Muramasa theorized that he was summoned in Shirou's body because Shirou has a similar body and mind to that of Muramasa's. Furthermore, he believes Shirou had shared his way of life and experienced a similar end. Muramasa speculates that Shirou could be his descendant, a theory that Parvati also believes to be true.
His personality is that of Muramasa, he speaks like an old man.
The ultimate sword he is aiming for is something that can purge the hate. A katana that cleaves through fate, destiny and karma. That can purge one's cause itself.
Shimosa Province: The Stage of Rivers of Blood and Mountains of Corpses
He was summoned by the Counter Force; a month or two in Shimosa before the arrival of Ritsuka Fujimaru and Miyamoto Musashi. He witnessed black ghosts attacking a paddy field during the day. Half of the farmers working on the field were killed, along with Onui and Tasuke's parents. Taking the children into his custody, he was given a hut from the west village. The hut used to belong to an old blacksmith, thus Muramasa was able to set up a workshop.
When Onui and Tasuke brought both Ritsuka and Musashi to her grandpa's house. The grandpa is Muramasa, who is called the Fearless Youth (精悍な青年, Seikan'na seinen?), Ritsuka feels somewhat familiar to him, while Musashi was surprised to see him to be a little young and awes at his katana pieces. At first he is wary of the stranger until he learns both Onui & Tasuke was in the care of Musashi and Ritsuka. When Lancer Purgatrio arrives and attacks the group, Muramasa counters Lancer Purgatrio's attack and blows his upper body apart with his fake sword. However, Lancer Purgatrio regenerates, surprising Muramasa to see his attack is ineffective against the undead. When Ritsuka provides backup support for Musashi, Musashi borrows Muramasa's finest katana; though he warns Musashi of the danger of the sword. After Musashi wins her duel against Lancer Purgatrio, the group rest in Muramasa's hut. The next morning, Muramasa gifts the Katana to Musashi, calling it "Myoujingiri Muramasa" when asked by Musashi for its name. Muramasa then reveals himself to be Sengo Muramasa and a Servant. After having a meal with Ritsuka and Musahi, Muramasa takes them both to his workshop, where they discuss Muramasa's nature as a servant and the current paranormal activity.
Saber is mentioned as being a swordsman skilled enough to cut even causality. Saber displays some battle abilities, he was able to dodge Lancer Purgatrio's spear and at the same time countered with his Blade-Testing Art, which blew Lancer's upper body half apart.
He crafted the blade Myoujingiri Muramasa (明神切村正?, lit. cutting gods and demons Muramasa), though he claims it to be a failure because he accidentally smithed it into, the conceptual realm of Demon and it became a Cursed Sword. It's a Glass Cannon, that'd cut both the victim and the user. It can cleave through the supernatural, on a conceptual level. It can cut through armor, boulders and even steel, but it is not something that a normal human can use. Musashi claims its whole structure and form made it feel much lighter than a feather when swung around and it has a whole new level of divinity within it. The katana is still imperfect as it can't really cut off anyone from fate or destiny but it can at least sever a cause.
- Fate/Grand Order Epic of Remnant - Shimosa Province: The Stage of Rivers of Blood and Mountains of Corpses - Act 04: Song 2 ~Inferno~ (Prologue)
- Fate/Grand Order Material Book V - Parvati Profile.
- Fate/Grand Order Epic of Remnant - Shimosa Province: The Stage of Rivers of Blood and Mountains of Corpses - Act 03: Song 1 ~Purgatrio~ (Final)
- Fate/Grand Order Epic of Remnant - Shimosa Province: The Stage of Rivers of Blood and Mountains of Corpses - Act 15, translated by You at Beast's Lair.
 Fate/stay night [Unlimited Blade Works] Animation Material I - Kinoko and Takashi Q & A, p.041 [T]
Q: Sasaki Kojirou spent his entire live sword training in the mountains, so how did he acquire a sword like the Bitchu Aoe (Blue River of Bitchu)? Was he not spending his time farming on the farmlands?
Q: Sasaki Kojirou spent his entire live sword training in the mountains, so how did he acquire a sword like the Bitchu Aoe (Blue River of Bitchu)? Was he not spending his time farming on the farmlands? <Sunday>
Nasu: Kojirou is the son of a ordinary farming family, living an ordinary farm life and separated from ordinary common sense. Ordinarily He met a master swordsman who had retired deep into the mountains, and began his ordinary life in the mountains himself. He was enthralled by the swordsmanship of the master, and he began training under him the next day. After one month, the master swordsman drew his last breath, and Kojirou completely threw himself into the path of a swordsman. By the way, what the master swordsman talked on about was the refined behavior of a swordsman--a communion with nature, so to speak. He did not instruct Kojirou on anything related to sword techniques. The Bitchu Aoe may have been the master's, or perhaps he received it from the Holy Grail when the legendary soul was summoned. It is simply something thought to be part of who he is.
Takeuchi: So he only witnessed the opening of a performance [referring to swordmanship]... so he's really a genius among geniuses isn't he!?
Nasu: Isn't it obvious. Don't underestimate a chivalrous man person who is eligible as a Servant despite being nameless. He was raised in both mind and body in those mountains. Even without a katana that master swordsman can cut through dimensions. Sengo Muramasa, that which can cut even casualty.
佐々木小次郎は生前ずっと山で剣を振るだけの人生を過こしたそうですが、そうするとどうやって備中青江のような業物を手に入れたので しょうか？というか、ちゃんと農民として農作 業をしたりしてたのでしようか？ ＜Sunday＞
奈：あの男はフツーの農家の子供で、フツーに村の暮らしとか人間の常識からズレていて、フツーに山奥に隠れるように隠居した剣聖に出会い、フツーに山で暮らすようになったんだ。はじめて剣聖の太刀筋を見た時に心奪われ、翌日から弟子入りするも剣聖はひと月ほどで息を引き取り、後はいびつながらも純粋に剣の道を究めた。ちなみに、剣聖が話してきかせたものは剣士としての雅な立ち振る舞いーーー即ち花鳥風月のみ。剣に関しては佐々木某に何一つ教えなかつた。備中青江は剣聖の持ち物か、 あるいは英霊と して召喚された時に聖杯から与えられた。佐々木小次郎としての出で立ち、と思われます。
- Fate/Grand Order material I - Emiya, p.105