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Katsuobushi's distinct umami flavor comes from its high inosinic acid content. Traditionally made katsuobushi, known as karebushi, is deliberately planted with Aspergillus glaucus fungus in order to reduce moisture.
Upon being placed on hot food, the heat waves causes the thin and light katsuobushi to move about, giving it a special aesthetic look. It is placed on pizzas to make the top of the pizza seem alive with the "dancing" katsuobushi.
The bonito fish is beheaded, gutted and filleted. The fatty belly area does not lend well to being preserved, so it is also trimmed off. The fillets are then arranged in a basket and simmered just below boiling for an hour to an hour and a half, depending on the size of the fillets. The rib bones are removed after the fillets have been boiled.
The fillets are then smoked using oak, pasania, or castanopsis wood; this process can take up to a month. They are smoked for 5–6 hours in one session, left to rest for one day for the condensation to rise to the surface, then fired and smoked again the next day, repeating this smoking and resting cycle 12–15 times. The built up tar from the smoke is cleaned from the surface using a grinder. At this stage the fillets are called aragatsuo (荒節) and most commonly found in stores shaved and packaged for sale under the name katsuo-kezuri-bushi (鰹削り節) or hanakatsuo (花かつお)—they are not true katsuobushi without the last fermentation stage, but still valued as a good substitute.
The last stage of creating a katsuobushi is to allow the fish to sun-dry using the assistance of mold. The fillets are sprayed with Aspergillus glaucus culture and left for 2 weeks in a closed cultivation room. The mold ferments the fillets and also siphons out any residual moisture.
The mold is continually scraped off, with further sun-drying of the fish increasing hardness and dryness until it resembles a piece of wood, with less than 20% of its original weight. By definition, only fillets that have been treated in this manner may be referred to as a Katsuobushi. However, after repeating this process of mold growth and sun-drying at least twice, the katsuobushi can also be called karebushi (枯節) [Japanese translation: dried fillet], and fillets repeating this process more than three times can be called honkarebushi (本枯節) [Japanese translation: true dried fillet]. When tapped together lightly, they sound almost metallic, and unlike their dull beige outer appearance, when broken open they are a translucent deep ruby color inside. Rarely, very high-end honkarebushi repeat this drying process for over two years. 
Katsuobushi is today typically found in bags of small pink-brown shavings. Smaller, thinner shavings, called hanakatsuo (花鰹; はなかつお), are used as a flavoring and topping for many Japanese dishes, such as okonomiyaki. Larger, thicker shavings, called kezurikatsuo (削り鰹; けずりかつお), are used to make the ubiquitous dashi stock.
In addition to making dashi, other popular uses of katsuobushi include:
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