To unlock this trophy you can't just punch out Satan with any regular Y attack.
First, you need to rescue 274 hostages and unlock The Brode (Uma Thurman's The Bride from Kill Bill).
Secondly, get to the end of a level with the Devil on it using The Brode and then use her special attack (circle attack), which is the Five Step Exploding Palm Technique. The Devil will go flying, hit the ground, and then explode. Make sure not to knock him off of the platform so that you can't see him. In order to get credit for the kill, you need to actually see the Devil explode.