Born in 1776 as the fourth son of the low-ranking samurai Owada Seibei of Kubota Domain in Dewa (today Akita). His childhood name was Masakichi, later Taneyuki, then Atsutane. At 20 he ran away to Edo, and after years of hard study was in 1800 adopted by Hirata Atsuyasu, a samurai of Bitchu Matsuyama Domain. In 1803 he came to know the learning of Motoori Norinaga, and calling it 'entering the gate in a dream,' declared himself a disciple of the by-then deceased Norinaga (they had never actually met). He named his home in Edo 'Ibukinoya' and opened a private school. Taking over and developing Norinaga's kokugaku critically, he established a distinctive 'Restoration Shinto' (Fukko Shinto). Whereas Norinaga was a positivist kokugaku scholar grounded in the study of the Kojiki and Man'yoshu, Atsutane argued for a hidden realm of spirits and the immortality of the soul, and drew into Shinto elements of Buddhism, Daoism, Confucianism, and even Christianity to build a grand religious system. His principal works include 'Koshi-den,' 'Tama no Mihashira,' 'Senkyo Ibun,' and 'Kokon Yomi-ko.' In 1841 the shogunate ordered him to cease writing and return to his home domain, and he went back to Akita, where he died in 1843 at age 68. His disciples, including posthumous followers, reached over 1,330, and he exerted the greatest ideological influence on the late-Tokugawa Sonno Joi movement.

A passionate, practical thinker rich in religious inspiration. He had the side of a mystic who earnestly investigated and recorded supernatural phenomena — dreams, ghosts, goblins, and immortals. Whereas Norinaga's learning was an emotional kokugaku of 'mono no aware,' Atsutane was combative, evangelistic, and active. In the late Tokugawa period, as the contradictions of the bakuhan system came to the surface, he spread Restoration Shinto as a popular religion and passionately preached 'the rebirth of Japan centered on the emperor.' A man of fierce feeling, his criticism of the shogunate was biting, and in the end he received the order to cease his writings.

Atsutane's disciples spread nationwide, with records of over 1,330 names preserved. Among them were figures as varied as Sato Nobuhiro (statesman-economist), Okuni Takamasa (Shinto scholar), and Miyaoi Sadao (agricultural administrator), and they formed the ideological base of the late-Tokugawa Sonno Joi movement, the Boshin War, and the Meiji Restoration. After the Restoration, Restoration Shinto became the theoretical ground for the separation of Shinto from Buddhism and the subsequent anti-Buddhist movement, and one of the sources of State Shinto. From the viewpoint of modern religious studies, he is evaluated as a pioneer who reworked traditional Shinto into a modern religion. The site of his old residence in Akita is preserved as the Hirata Atsutane Former Residence, and a monument stands on the site of the Ibukinoya in Tokyo. It is even said that the depiction of the spirit world in Miyazaki Hayao's 'Spirited Away' draws indirect influence from Atsutane's 'Senkyo Ibun' and kindred works.