There is no available information regarding the fate of Muzan’s family, namely Rei and her unidentified daughter, who was shown in episode 7 of season 1. It is highly likely that Muzan used Rei as a means to integrate into society and avoid detection by demon slayers. Some speculate that Muzan may have chosen Rei because of her resemblance to a prominent woman in society, providing valuable information to help him locate the Blue Spider Lily, his ultimate goal.

Muzan’s Family
To summarize episode 7 of season 1, Tanjiro was chasing Muzan due to his familiarity with the scent of the demon who killed his family. When they faced each other, both showed hostility towards the other. Tanjiro was ready to draw his blade. However, their confrontation was interrupted by the appearance of a little girl in Muzan’s arms who called him “daddy.” The girl with pigtails then asked who Tanjiro was, which left him speechless, along with the viewers.
Muzan, who is typically portrayed as a pure evil demon, was now holding a young girl, which was a jarring contrast. It was later revealed that Muzan was living as a human, which Tanjiro came to understand.
Muzan’s expression changed from irritated to calm, and he asked, “Do you have something you want from me? You’re in quite a panic.” Just then, a woman approached them, and the little girl exclaimed, “Mama,” revealing that the three of them were a family.

Tanjiro was overwhelmed with thoughts upon realizing that both the woman and the girl had the scent of humans. He wondered if they were aware that Muzan was a demon who fed on humans. But, as the family walked away, Tanjiro stood there, lost in thought, until Muzan suddenly scratched the neck of a random passerby, transforming him into a demon.
Returning to Muzan’s family, when they were just about to leave, the little girl asked if Muzan was going with them. Muzan responded in a gentle voice that he was busy with work. The woman appeared concerned for Muzan, but he reassured them that everything would be alright. This was the final time we saw the family, and even at the conclusion of Demon Slayer, they were not mentioned again.
Read more: 10 Interesting Facts About Muzan Kibutsuji in Demon Slayer

Why Does Muzan Have a Family?
Rei’s appearance suggests that she is a wealthy member of the community. It is possible that Muzan, in his human form, married her for her money. This is not surprising given that in episode 1 of the Entertainment District Arc; we see Muzan as a young child who is living with a prestigious family that has adopted him. The family describes him as a bright child who is a blessing to take care of. Muzan’s supposed mother also remarks that she is very happy that he is kind and considerate towards the servants.
Later on, while Muzan’s “parents” are speaking to other parents, they reveal that Muzan has a rare skin disease that prevents him from being exposed to sunlight. These are lies that Muzan has told them to manipulate those around him so that he can blend into society and live a normal life without being easily caught by demon slayers.

Muzan uses various disguises to blend in with his surroundings, as noted by yaseenthatguy. He has assumed multiple forms, including a child form whose purpose was to develop medicine to overcome his sensitivity to sunlight. He also took on the guise of a geisha in order to gather information about the Blue Spider Lily while inside the Infinity Castle and appeared as a human male husband to collect data on the human world. These disguises allow Muzan to move about undetected and gather intelligence without arousing suspicion.
Muzan assumes various forms and personas for the sole purpose of achieving his ultimate goal, which is to obtain The Blue Spider Lily.

What Is the Blue Spider Lily?
You might recognize it from different anime series like Inuyasha, Tokyo Ghoul, and The Promised Neverland. However, this flower actually exists in real life as the Red Spider Lily. In Japanese culture, the flower is associated with death, loss, and separation, and its appearance in anime often foreshadows a character’s imminent demise.
We first see the blue spider lily in episode 1 of the Entertainment District Arc when Muzan is disguised as a young boy. He is seen having a discussion with Akaza regarding the Blue Spider Lily. Akaza informs Muzan that there is no concrete evidence of the flower’s discovery, much to Muzan’s disappointment.
The Blue Spider Lily isn’t mentioned again until chapter 127, where Muzan’s backstory is revealed.

Muzan’s life has always been closely tied to death. When he was born, he was thought to be stillborn and was nearly cremated before he cried out and proved he was alive. Throughout his life, Muzan was plagued by illness, and a doctor once told him that he wouldn’t live to see his twentieth birthday. However, the doctor was determined to cure Muzan, and he used a special treatment made from Blue Spider Lilies. In a fit of rage, feeling that he wasn’t improving, Muzan killed the doctor, only to later realize that the treatment was actually working.
Muzan began to regret killing the doctor once he realized that his treatment was not yet complete and that he required more. However, there were two major side effects: firstly, Muzan couldn’t walk in the sunlight, which he despised more than anything else, as he believed that if he could, he would possess the perfect immortal body.
The second side effect was that Muzan needed to consume human flesh, but this wasn’t a significant concern for him. Muzan was determined to obtain the rare Blue Spider Lilies necessary to complete his treatment and make him fully immortal, able to walk in the sun without any restrictions.

Muzan lacks the knowledge to produce the medicine required to complete his transformation and has no idea where to find the elusive Blue Spider Lilies. The treatment demands the actual flower, which he doesn’t know how to grow or cultivate. This led to Muzan creating the Twelve Kizuki, the 12 upper demons, in order to locate and acquire the Blue Spider Lilies to fulfill his ultimate goal.
Where Is the Blue Spider Lily?
Fast forward to chapter 205, where the descendants of our favorite Demon Slayer characters are shown, along with the fate of the Blue Spider Lily. For many years, these flowers remained undiscovered until a descendant of Inosuke stumbled upon them. She happened to be a botanist, and upon finding them, she began to study the flower. She soon discovered that the Blue Spider Lily only comes out two or three days of the year and only blooms during the day. Unfortunately, the botanist made a mistake and let all of the flowers wither away after studying them.
It is likely that the reason Muzan was unable to find the Blue Spider Lily is that it only blooms during the day. Furthermore, it is possible that Inosuke’s descendant, Habihira Aoba, intentionally let the plants wither away due to their knowledge of the history of her great-grandfather and the past conflicts between humans and demons. It seems that Aoba wanted to prevent a repeat of history where humanity discovered the possibility of immortality.

Is Muzan Capable of Loving?
The answer is no. Given his long lifespan, it’s not surprising that Muzan had women around him. However, he is a master manipulator, as evidenced by his relationship with Daki. While Daki admires Muzan, he views her as nothing more than a mere stupid child, as evidenced by the tweet below from the manga:
In general, Muzan only shows interest in a person when he perceives some value in them.
It has been reported that Muzan was married at least five times, and in each of these marriages, his wives allegedly committed suicide due to his constant verbal abuse. However, this information is only found in a doujinshi and may not be entirely accurate. Nonetheless, it’s worth considering that Muzan was once human, and like other demons in the series, he may still have a small piece of his humanity left. It’s possible that he, like other demons, craves connection despite his malicious and manipulative nature.

Muzan was born without breath and was stillborn, leading his family to give up on him. While he cannot recall any specific humans, their emotions and feelings pass onto him, affecting and influencing him. It’s interesting to consider which emotions may have impacted Muzan. For instance, could it have been the same emotions that kept Rei and her daughter alive and caused Muzan to refrain from torturing them? It’s worth noting that when interacting with Muzan, Rei did not exhibit fear but rather looked to him for protection. Perhaps Muzan genuinely cared about Rei and her daughter, and they were the only humans who managed to survive their encounter with the Demon King. However, this is merely a theory and cannot be confirmed.