According to many, on June 1st 1920 Ohtsuka was promoted to 4th Grandmaster of Shindo Yoshin Ryu Jiu Jitsu. This has been much debated, however. The 3rd grandmaster of Shindo Yoshin Ryu, Tatsuo Matsuoka (grandson of the art's founder), did not pass away until 1989, 7 years after Ohtsuka's death. Also, Ohtsuka's instructor, Nakayama, had previously branched off from the founder to begin his own style and lineage of Shindo Yoshin-ryu.

It is also heavily debated as to how much or little of the actual shindo yoshin-ryu jujutsu curriculum was later adopted into Wado ryu. Also, Ohtsuka had, at some time during the early 1920s, been awarded a "menkyo kaiden" certificate. This certification essentially meant he had gained full proficiency in the system. At the very least, Wado was heavily influenced by the shindo yoshin-ryu principles, and some of its waza (techniques).

Nonetheless, Ohtsuka's path as a budoka was set by this point, and would soon take its first fateful turn. He would soon meet the father of modern karate, Gichin Funakoshi. In the fall of 1922, Ohtsuka was giving thought to his future. Although his job at the bank appeared secure, he was not satisfied. He wanted to devote his life to his true passion, the martial arts.

This interest was heightened even more when Ohtsuka found out that an Okinawan school teacher, Gichin Funakoshi, was invited by Crown Prince Hirohito to perform karate before the Emperor of Japan at a public hall in Tokyo. Ohtsuka attended the demonstration, and as a result became one of Funakoshi's 35 original Japanese students.

Because of the popularity gained by the demonstration, Funakoshi stayed in Japan. Ohtsuka was at Funakoshi's dojo nearly every night, absorbing the art. By 1924, he became chief assistant instructor. On April 24th, Ohtsuka was named among the first seven black belts in modern karate.

Funakoshi came to rely heavily on Ohtsuka. At 32, Ohtsuka's realized his dream of being a full time martial artist. However, he found Funakoshi's karate (later named Shotokan) lacking. He felt there was little sense behind the philosophies, the kata seemed to have no practical application, and the movements were too confined. Also, Funakoshi did not allow free sparring, leaving no way to truly test his karate. Therefore, while still assisting Funakoshi, Ohtsuka trained with other notable masters. These included Kenwa Mabuni, founder of Shito-Ryu Karate, as well as Choki Motobu, famous for his excellent technical and fighting abilities, and Morihei Ueshiba, founder of Aikido.

Ueshiba O'Sensei helped Ohtsuka find the missing link, and officially begin the creation of Wado. Like Shindo Yoshin Ryu Jiu Jitsu, Aikido is a direct descendant of Aikijujutsu (a part of Samurai combative). The greatness of Aikido is in its reliance on natural movements, focusing on breathing, relaxation, and "ki" (lifeforce; breath; spirit). Whereas most karate tended to generate tension in performing techniques, Aikido was the opposite. Instead of meeting force of force, it blended with and redirected the opposing force or ki.