Neko Zombie's history is mostly unknown but Gregory mentions that a family of cats with luxorious fur once resided in Gregory House. One stormy night, the son of the family was attacked, stitched up, and ultimately rendered into a zombie version of his former self. It is heavily implied that Gregory himself did the deed.
Neko Zombie is locked in a cell and presumably starved as he often speaks of being hungry in Soul Collector. Although locked away, he is aware of Gregory and his mother Gregory Mama's collection of lost souls (ultimately for Gregory Mama who consumes souls in order to revitalize herself). With this knowledge in mind and a desire to take revenge on them for their unspecified crime against him and his family (most likely murder), Neko becomes a helper.
During the second series The Second Guest, the second guest hears Neko screaming and wailing one night during a storm. Approaching his room and entering it, she finds Neko Zombie crying. Neko Zombie questions if the guest pities or fears him and then mentions that he looks like the second guest's heart: broken and sewn up. (Given the symbolic nature of Gregory and the others, it is said that Neko symbolizes the broken heart, while also symbolizing the desire to escape and fix things.) He undoes his shackle, revealing a sore-looking wound across his foot. The second guest gives him a bandana for the wound but Neko only tells her to escape when the moon is full.
During the full moon, the second guest escapes outside Gregory House while Neko carries a candle to Gregory Mama's room. There, he sets fire to the hotel, seemingly destroying Gregory Mama and Gregory in the process. He then turns to the second guest, telling her that she must jump into the flames to remove her doubt and ultimately destroy Gregory House and all of occupants (as Gregory House fed off the doubt of the second guest).
Unfortunately, Neko seemingly perishes and the second guest hesitates, watching as Gregory House burns. Gregory and Gregory Mama, having partly survived the fire, recruit the second guest into their family, transforming her and rebuilding Gregory House. Tragically, Neko's sacrifice was for nothing as she became part of the madness and one of the House's soul-thieving occupants.
It is not shown but given the mention that Neko Zombie is a part of the world that Gregory House creates, he possibly resurrected with the rest of them.
Neko Zombie acts as the tutorial stage of the game. He explains to the player character (who can either be male or female depending on player choice) that he has something to tell them and that they must steal the key to his room. After doing so, Neko Zombie reveals that the player character can collect souls to give to Death (a grim reaper who visits the player character in dreams and takes souls to escape Gregory House). Neko Zombie reveals a soul in his possession and requests that player character guess what his favorite food is for it (chocolate, which is "sweet but not cold"). After giving the soul in his possession to the player, he also provides information about collecting souls in the possession of the other hostile residents such as listening to conversations to get information about their weaknesses that will need to be exploited to get the souls they hold.
Ultimately, the player character gathers all the souls and gives them to death. He/she manages to escape Gregory House but returns to save Neko Zombie. The undead cat tells them to go and to not look back. Like at the end of The Second Guest, Neko Zombie escapes his cell and burns down the house. Unfortunately, the player character looks back and becomes a permanent resident when he/she chooses to remain in Gregory House over "cold reality". Once again, Neko's efforts are in vain.
Although not one of the hostile residents, Neko Zombie still has a "Horror Show" (the method through which the hostile Gregory House residents attack the player) should the player visit him at bad times of the night/day.
During bad times throughout the game, Neko will become too hungry to think straight and will attack the player for food, stealing any health items and doing damage.
Neko Zombie is hostile towards the idea of people pitying him, such as telling the player character that he doesn't need their charity. Despite that, he genuinely wants the player character and second guest to escape Gregory House and return to the real world. Thus, he helps them with their attempts to escape that world. He is perfectly willing to sacrifice himself in the process, as evidenced when Gregory snapped at Neko Zombie that if the second guest jumped into the flames (and thus purged herself of all her doubts), he too would be destroyed. Neko Zombie disregards that note.
He also is shown screaming and wailing during lightning/thunderstorms. This is a given since his transformation into his current state happened on a night such as that.