Spoiler Alert: This article contains spoilers for Naruto.
The reputation of Kakashi Hatake has only grown throughout the events of Naruto and Naruto: Shippuden. He obtained mastery over the Sharingan at a young age and climbed the ranks of the Hidden Leaf Village's ninja hierarchy, eventually earning the position of Hokage right before Naruto Uzumaki took the title. But throughout his long career as a ninja, he eventually lost his Sharingan abilities. How did this happen?
Kakashi Hatake was a prodigal ninja from a young age. He graduated from the Hidden Leaf Ninja Academy at age 5 and became a chūnin only a year later. He became a higher-ranking jōnin by age 12 and would later become an Anbu assassin. After teaching Naruto and the rest of Team 7, he was present alongside his students in the final battle against Kaguya Ōtsutsuki and helped save the world. He then served as the sixth Hokage and governed over the Hidden Leaf Village.
But even a ninja as powerful as Kakashi has suffered a few losses in his career. One of them cost him his Sharingan.
How did Kakashi lose his Sharingan?
Kakashi's Sharingan is not his own. In fact, the Sharingan is a bloodline technique that can only be used by the members of the Uchiha clan. In one of his earliest missions as a jōnin, his friend Obito Uchiha sacrificed his life to save Kakashi from being crushed to death. In his seemingly-last moments, he instructed their mutual companion Rin to transplant his one remaining Sharingan to replace an eye that Kakashi lost. After accidentally killing Rin, he obtained the Mangekyō Sharingan.
The Sharingan allows its user to copy the movements of his opponents, while the upgraded Mangekyō grants him access to use the special jutsu, Kamui. He learned to master it over the years, though he is unable to turn it off in the same way an Uchiha can and covers it up to keep it from draining his chakra. Though it takes a larger toll on his stamina than it might on a full-blooded Uchiha, he can access many of the same abilities and jutsu that an Uchiha can.
During the birth of the Ten-Tails' Jinchūriki and the battle against a revived Madara Uchiha, Kakashi is reunited with Obito who was revealed to be the secret leader of Akatsuki. While Obito eventually joins Naruto and reconciles with Kakashi, they still have Madara to deal with. As part of his plans, Madara begins stealing Sharingans and Rinnegans in order to enhance his abilities. One of them is Kakashi's.
Madara plucks it out from his head in order to pursue an escaping Obito. While he loses his Sharingan techniques, Naruto uses the power of his Six Paths chakra to restore his normal eye.
Does Kakashi get his Sharingan back?
Yes and no. In the final battle against Kaguya, only Kakashi and his Team 7 students are able to stand against her. Kakashi is able to awaken Obito once more to add to their ranks. The two of them fight side by side once more in order to protect Naruto and Sasuke Uchiha. When Kakashi is about to be dealt a fatal blow, Obito sacrifices himself by taking the hit.
After perishing a second time, Obito does exactly what he did during his first death. He lent Kakashi some of his strength and granted him temporary access to the Mangekyō Sharingan in both of his eyes. With his new powers, he works together with Naruto, Sasuke, and Sakura Haruno to defeat Kaguya and save the world. But as Obito's spirit passes on, Kakashi's Sharingan disappears with him.
It would take a ninja as skilled as Kakashi to master a bloodline technique that doesn't belong to him. And the morals of Naruto often stress, it was because he had his friends by his side that he was able to do so.