Kōdō (香道, "Way of Incense") is the Japanese art of appreciating incense, and involves using incense within a structure of codified conduct. Kōdō includes all aspects of the incense process, from the tools (香道具 kōdōgu) – which, much like tools of the tea ceremony, are valued as high art – to activities such the incense-comparing games kumikō (組香) and genjikō (源氏香). Kōdō is counted as one of the three classical Japanese arts of refinement (kadō, or ikebana for flower arrangement, kōdō for incense, and chadō for tea and the tea ceremony), but it is relatively unknown among modern Japanese people.
According to legend, agarwood(aloeswood) first came to Japan when a log of incense wood drifted ashore on Awaji-shima island in the 3rd year of Empress Suiko (595 CE). People who found the incense wood noticed that the wood smelled marvelous when they put it near a fire. Then they presented the wood to local officials.
Of course we know from history that agarwood came to Japan along with the supplies to build a Buddhist Temple in the year 538 CE. At first the incense wood was used for religious purposes (Buddhism) then was burned for appreciation and became one of the most popular traditional Japanese arts. 
Kodo originated from informal incense games played by the Japanese aristocracy 
The structure and manner of Kōdō was organized similar to the present style in the Muromachi era [approximately the 15th century CE), almost the same time as the Japanese Tea Ceremony and the Ikebana style of flower arrangement.
Types of incense
|Manaka||真那伽||Malacca, Malaysia||No Scent|
|Manaban||真南蛮||[ Unknown ]||Salty|
|Sumotara / Sumontara||寸聞多羅||Indonesia||Sour|
- Manaban comes from the word Nanban which means "Southern Barbarian" and was brought to Japan by Portuguese traders with unknown origin. 
Participants sit near one another and take turns smelling incense from a censer as they pass it around the group. Participants comment on and make observations about the incense, and play games to guess the incense material. Genjikō is one such game, in which participants are to determine which of five prepared censers contain different scents, and which contain the same scent. Judgements are marked using genji-mon, linear patterns which designate chapters in the Tale of Genji.
Ten virtues of kō
- It brings communication with the transcendent
- It refreshes mind and body
- It removes impurity
- It brings alertness
- It is a companion in solitude
- In the midst of busy affairs, it brings a moment of peace
- When it is plentiful, one never tires of it
- When there is little, still one is satisfied
- Age does not change its efficacy
- Used everyday, it does no harm 
Incense folklore includes art, culture, history, and ceremony. It can be compared to and has some of the same qualities as music, art, or literature. Incense is also an integral part of the Japanese tea ceremony, just like Calligraphy, Ikebana, and Scroll Arrangement. These are five Classical Chinese Arts. Incense Lore involves natural incense woods and not artificial substitutes.
Supplies and costs
Kōdō incense material is readily available at quality incense suppliers. However incense wood is very expensive. For example, lower grade Kyara used for Kōdō costs about 5,000 yen per gram. Top quality Kyara costs about 13,000 yen per gram, or about ten times the equivalent weight of gold. Though it can only be warmed and used once, it can be stored for hundreds of years. If the particular piece of incense wood has a history, the price can be even higher.
- Pybus, David. Kodo: The Way of Incense. Tuttle, 2001. (ISBN 0-8048-3286-2)
- Morita, Kiyoko. The Book of Incense: Enjoying the Traditional Art of Japanese Scents. Kodansha International, 2007. (ISBN 4-7700-3050-9)
- Tea Lore - 茶學識 Tea Arts - 茶藝 Tea Lore, Tea Arts, Tea Culture, Incense Lore, and other classic Asian Arts
- Japan-Zone overview
- Liza Dalby's notes on Heian Period kōdō and genjikō
- Japanese Incense Ceremony
- www.avivson.ltd.uk - a 12.41 min documentary film "KODO - The Art of Japanese Incense" produced by Janus Avivson, 2005, with narrative in English, French and Japanese.
- Wide-ranging information about Japanese incensero:Kōdō