Munehisa is a middle-aged man with gray hair, faint stubble, sideburns and earrings. A tattoo of a gecko is on the left side of his neck near the back. He usually has a lollipop in his mouth.
He wears a gray hat with yellow ear defenders, a black turtleneck sweater, a long gray coat with a red peace symbol on it, blue jeans and dark boots.
Munehisa Iwai is the owner of the airsoft shop, "Untouchable" in Shibuya. When the protagonist asks him about the "real" firearms, Iwai shows interest in his motive, says he dislikes the police and offers to supply the real stuff in exchange for the protagonist assisting him in shady activities. He is responsible for the selling of weaponry used by the party, the pawning of items found in Palaces, and when the Phantom Thieves steal a treasure, they pawn the treasure off to him. Building up a Confidant with him makes him offer a discount for the protagonist.
Iwai grew up with a single mother who lived a self-destructive lifestyle, and the lack of a loving family led him to quickly join the Yakuza. There, he became sworn brothers with Tsuda in the Hashiba, who is now a rival of his. Several years ago, Iwai was approached by a woman who attempted to sell her infant son for drug money; when he refused, she abandoned her son and fled. Iwai subsequently adopted the baby and named him Kaoru. Not wanting his son to suffer the way he did as a child, he was forced back into civilian life and runs Untouchable to support him. Iwai did not have the heart to tell Kaoru about his past or how his father was involved with the Yakuza, instead telling him that he was a family friend who adopted him after his parents died in a car crash.
After Mementos starts appearing in the real world, Iwai wonders what's going on and worries about Kaoru.