At the incident at Honno-ji Temple in 1582, he declined persistent requests for cooperation from Mitsuhide AKECHI, his longtime colleague and the father of his daughter-in-law, shaved his head, changed his name to Yusai Genshi, handed the headship of the Hosokawa family to his son Tadaoki, and retired.
天正10年（1582年）に本能寺の変が起こると、藤孝は長年の僚友であり縁戚でもある明智光秀の再三の協力要請を断り、剃髪し幽斎玄旨と号して隠居、忠興に家督を譲った。