Roku found Fang when he was just a baby, not yet hatched from his egg. Fang's parents were gone, so Roku raised the young dragon as his own and they've been inseparable ever since.
When Roku's Island had a massive eruption, Fang tried to help his master. Even though Roku insisted that he leave, Fang stayed with him the whole time. After initially helping Roku to contain the eruption, Fire Lord Sozin betrayed Roku and left him to die. Fang then curls up around Roku to protect him and the two die together when they are buried by volcanic ash. Fang then enters the Spirit World with Avatar Roku.
Fang first appears to Aang in the episode "Winter Solstice Part 1: The Spirit World." After Aang discovers he is in his spirit form for the very first time, he is confronted by Fang. Fang takes Aang to the Fire Temple on Crescent Island to see Avatar Roku's statue. Aang finds out that Avatar Roku wants to speak to him about Sozin's Comet, and the only time they can talk is during the Winter Solstice. The dragon then takes Aang back to his body. Fang isn't seen again until "The Avatar State", when Roku talks to Aang about the dangers of the Avatar State. In his most recent appearance in The Avatar and the Fire Lord, he is shown flying Roku and Aang to the Southern Air Temple in Roku's memories, and then in his living form during flashbacks.
Now as a spirit, Fang gains several abilities common to all those who reside in the Spirit World, such as intangibility (passing through solid objects) and invisibility. Due to being a dragon, he retains his ability to fly. But what really makes Fang unique is that he has telepathic abilities, which are used for communication with others as well as information transmission, and are sent by using its whiskers. When Aang first sees Fang, the latter uses its ability to tell Aang that he was Roku's dragon. When they reach the Fire Temple, he uses it again to let Aang know when he can talk to Roku. Afterwards, he sends Aang back to the real world by flying into Hei Bai's statue, which reawakens Aang's lifeless, meditating shell. The only people known to see him in his spiritual form in the mortal world are Avatar Aang and General Iroh.