The Adored Elder Sister

is episode 389 of the Naruto: Shippūden anime.

Summary
After Hinata returns from the Academy, she is passionately welcomed by Hanabi, who immediately invites her to play together. Much to the younger Hyūga's dismay, Hinata is to train with her father, therefore disallowing her to spend time with her sister. The next morning, Hanabi and Natsu walk through the village when they witness Naruto being scolded. As she asks her caretaker of what is going on, Hanabi is told to stay away from Naruto. Returning home, Hanabi rushes to finish her work. Afterwards, she peeks on Hinata's training session with Neji and witnesses the latter trying to harm her, only to be stopped by Hiashi who then activates his curse seal. The Hyūga Elder, noticing that Hanabi was peeking earlier, approaches his granddaughter and explains what had happened as well as the destiny of the Branch Family to protect the Byakugan. Following this event, Hiashi becomes Hinata's sparring partner instead. The Elder voices his concern and notes Hinata is not fit to be the clan's heiress. Hanabi later trains hard on her own, causing the Hyūga Elder to notice and inform her father. Fearing Hinata is not strong enough to become the head of the clan, Hiashi arranges a fight between the two sisters to determine which one of them is suitable. This battle ultimately ends in Hinata's defeat, causing Hanabi to be declared as the clan's new heiress.