Butia is from a local Brazilian vernacular name likely derived from Old Tupi ᵐba atí, meaning 'thorny thing', which probably refers to the spines along the petiole margins of most species.

The specific epithet yatay is adopted from the Guaraní language word for such palms, yata'i, which itself refers to the small, hard fruit.

[5] The trunks grow from 30 to 55 cm in diameter, usually retaining a coat of old leaf bases which do not shed easily naturally and which remain persistent for many years.

[4][6] Compared with other extant palms in the region, Butia yatay has the largest-sized pollen grains on average.

[10] In Brazil it only occurs in the southernmost state of Rio Grande do Sul, and there only in the municipalities of Giruá and Quaraí.

[4][6] In Argentina it occurs in the northern-center provinces of Chaco, Corrientes, Entre Ríos, Misiones (in the municipalities of Candelaria and San Ignacio) and Santa Fe.

[1] Bauermann et al. investigated the possibility of using palm pollen, including this species, in palynology, in order to try to provide more detail about the ancient changes in habitat in the state Rio Grande do Sul in Brazil by tracking the changes in distribution and abundance of the palms, but were unable to provide much detail on the subject.

[14] This slow-growing palm grows to 12[15]-18m[7] tall, with a trunk diameter of 50 cm,[7] in giant, ancient, almost monoculture groves in savannah habitats (called pampa(s) in Latin America).

[5] The nuts of this palm are alleged to have been the main diet of the glaucous macaw in 1993, although the taxonomy of local Butia populations has changed somewhat since then.

In 2012 the conservation status in Brazil was evaluated as 'vulnerable' by the Centro Nacional de Conservação da Flora.

Although it occurs over an extensive range, both the size and quality of the remaining habitat is threatened due to the expansion of forestry and agricultural activities.