The core story that made Sutoku a vengeful spirit is the blood-written curse transmitted by the Kamakura-period war chronicle Hōgen Monogatari^[1]. Exiled to Sanuki, Sutoku copied the Five Great Mahāyāna Sutras with his own hand, praying for the extinction of his sins and ease in the life to come, and sent them with a request that they be deposited at a temple in the capital. But the cloistered emperor Go-Shirakawa, suspecting that a curse was embedded in them, sent the sutras back. Enraged, Sutoku bit off his tongue and, with the flowing blood, wrote: "I shall become the Great Demon-Bond (daimaen) of Japan, make the sovereign a commoner and the commoner a sovereign," and "I dedicate this sutra to the path of demons"; thereafter, cutting neither nails nor hair, he took on a yaksha-like aspect and, while still living, is said to have turned into a tengu. "Great Demon-Bond" is a Buddhist term for a class of demons that deludes the human heart.

After Sutoku's death, whenever calamity continued in the world it was attributed to the curse of Retired Emperor Sutoku. In the third year of Angen (1177), a great fire that burned the capital and forceful appeals by Enryaku-ji followed one upon another, and the upheaval that eventually led to the Jishō-Juei War—the fall of the Taira, the rise of the Minamoto, and the decline of the regent house—was ascribed to Sutoku's wrath. The court hastened to pacify him: in the third year of Angen it changed the title "Sanuki-in," named after his place of exile, to "Sutoku-in," and posthumously granted office and rank even to Fujiwara no Yorinaga, who had died in the Hōgen Rebellion. In the first year of Genryaku (1184) a shrine (the later Awata-no-miya) was built on the old battlefield of the rebellion.

Sutoku's vengeful spirit was depicted most vividly within literature. "Shiramine," at the head of Ueda Akinari's Ugetsu Monogatari^[2], is the tale of the poet-monk Saigyō visiting the Shiramine mausoleum in Sanuki to mourn Sutoku's spirit, whereupon the wrathful Retired Emperor Sutoku appears and converses with him. To Saigyō's admonition to cast off his attachment, Sutoku expounds the principle of dynastic revolution to justify his own rebellion, and reveals that he has already become a tengu and demon-king and is manipulating the world's disorder. Here Sutoku is described not as a long-nosed tengu but as a golden kite (tobi). Within the lineage of the Taiheiki and the Hōgen Monogatari, Sutoku came in time to be regarded as the foremost Great Tengu of Japan, ruling over the realms of tengu and demons.

The pacification of Sutoku continued even into the modern era. Vowed in the Keiō years and realized in the first year of Meiji (1868), the Shiramine Jingū^[3] is where his divine spirit, resting in Sanuki, was welcomed to the capital and enshrined. That on the very eve of the Meiji Restoration, when a new age was beginning, the curse of Sutoku was still feared and laid to rest, tells how long his vengeful spirit was dreaded. The framework of binding Sutoku together with Sugawara no Michizane and Taira no Masakado as the "Three Great Vengeful Spirits of Japan" is, as Yamada Yūji^[4] of vengeful-spirit studies rates him the greatest vengeful spirit in Japanese history, an early-modern arrangement that spread through the popular fiction and kabuki of the Edo period. A refined poet who left in the Hyakunin Isshu the verse "Swift is the current, and though the rock divides the rushing rapids…" is told of as a great demon-king who curses the throne—the two faces of Retired Emperor Sutoku are what may be called the very extremity of goryō belief.