Watanuki (a name meaning "April 1" in kanji) is known for having both a volatile and caring personality. Depending upon the person he talks to, his emotions tend to be overly exaggerated. He lives alone because his parents died when he was young, but harder than these conditions is the fact that his everyday life is plagued with strange spirits that only he can see, and they are drawn to him. Apparently this was inherited- it is noted that his blood smells good to spirits. One average day, while Watanuki is being chased by a legion of spirits, he comes across a strange house which the spirits are repelled by. He feels compelled to enter, and there meets Yuuko, who claims that it is a store which grants wishes in exchange for a price. Watanuki asks for the spirits to stop chasing him, and Yuuko agrees to granting it but only if Watanuki works as a helper in the shop until he accumulates enough time for her to make his wish come true. This is the beginning of Watanuki's part time job. As time goes by, Watanuki meets many different people who help him to develop and change his opinions on the world, and also to understand the world from Yuuko's perspective, which also helps him to mature.

Spoiler

When half way through both the anime and manga he loses the sight in his right eye due to a spider's grudge curse, his left iris turns a dull milky grey color. After failing to retrieve his sight in this eye , he receives half of Doumeki's right eye's sight, which causes his right eye to turn a dark green with a brownish tint (in the Anime), or gold-brown (in the Manga).

Spoiler

When Yuko disappears and he takes over the shop, his personality takes a drastic change as he adopts a number of Yuko's mannerisms. He still despises Doumeki and thinks that Mokona is annoying, but is shown to be considerably calmer; more reserved and a lot more mature, clearly shown by his acceptance of Himawari's marriage and wishing his condolences and his understanding of his customers' wishes.

(Source: xxxHOLiC Wikia, edited)