In order to obtain this achievement, you must first unlock hard mode by progressing through the story. Once unlocked, you must replay Steve's level (Abyss Gate) under hard conditions.
In this, you will begin in an alley with a few enemies to dispose of, the last of which will be a martial artsy type opponent dressed in a black coat. This opponent should drop an item once defeated. As soon as he is defeated you can return to the World Map and Yoshimitsu level (Kigan Island) will be unlocked.
Now you must simply complete the level on either Medium or Hard difficulty and the achievement will unlock.