He came from a humble background, but became prominent after leading a rebellion in 408 to overthrow Huan Xuan, who had usurped the Eastern Jin throne in 403.

After that point, using a mixture of political and military skills, Liu Yu gradually concentrated power in his own hands while expanding Jin's territory.

He ruled only briefly, for two years, before dying and passing the throne to his son, Emperor Shao of Liu Song.

An outstanding commander, perhaps the greatest of his era, he conquered two of the Sixteen Kingdoms and remained undefeated throughout his military career.

His great-grandfather Liu Hun (劉混) was originally from Pengcheng (彭城, in modern Xuzhou, Jiangsu), before moving to Jingkou.

Liu Laozhi, at the time, was a powerful warlord who controlled modern Jiangsu and Zhejiang except for the region around the capital Jiankang.

In 401, with Sun En, who had fled to Zhoushan Island in late 399, trying to launch a comeback and attacking Haiyan (海鹽, in modern Jiaxing, Zhejiang), Liu Yu fought him, winning several victories over him despite being outnumbered.

Sun En began to grow weaker and headed south on the coast, with Liu Yu following.

By summer 402, however, Liu Yu was again in the army, and by 403 he carried a general's rank, when Sun En's nephew Lu Xun (盧循), who had succeeded him after his death in battle in 401, attacked Dongyang (東陽, in modern Jinhua, Zhejiang), and Liu Yu repelled Lu's attack.

However, Liu Yu quickly defeated Huan Xuan's generals Wu Fuzhi (吳甫之) and Huangfu Fu (皇甫敷) and arrived at Jiankang.

Liu Yu entered Jiankang and declared the reestablishment of Jin, even though at this time Emperor An and his brother Sima Dewen were both still in Huan Xuan's control.

They quickly defeated Huan Xuan's general He Danzhi (何澹之) and took Jiang Province (江州, modern Jiangxi and Fujian), and then continued to head toward Jiangling.

He Wuji escorted Emperor An back to Jiankang, and Liu Yu effectively became regent, even though the government was at this point still a coalition of near equals.

For the next few years, he also made several offers to resign his posts, judging correctly that the imperial officials would not dare to accept them, to further establish the image that he was indispensable.

Also in 405, Lu Xun, who had in 404 marched south and captured Panyu (番禺, in modern Guangzhou, Guangdong) during the wars relating to Huan Xuan, offered peace to the imperial government by paying a tribute.

In 409, the Southern Yan emperor Murong Chao began a campaign of attacking and pillaging the Jin northern borders, intending to capture men and women to be trained as musicians.

In response, Liu Yu decided to launch a campaign to destroy Southern Yan, over the objections of most imperial officials, but was supported by Meng Chang.

In spring 410, Liu Yu captured Guanggu, ending Southern Yan, and considered further readying a campaign against Later Qin, but was informed that Lu and Xu were attacking north, and therefore quickly returned south towards Jiankang.

A number of imperial officials, including Meng, suggested that Emperor An be taken across the Yangtze River to evade Lu's forces, but Liu Yu refused, choosing to defend Jiankang.

Lu fled toward Jiao Province (交州, modern northern Vietnam) where he was defeated by the governor, Du Huidu (杜慧度).

With the state having been stabilized after Lu Xun's destruction, Liu Yu again turned his attention outward, hoping to use military victories to propel himself into sufficiently high public standing that he can take the throne for himself.

Meanwhile, in late 412, Liu Yu commissioned the general Zhu Lingshi (朱齡石) to attack Qiao Zong's Western Shu, secretly instructing him to take the long route to Qiao Zong's capital Chengdu by Min River (岷江), rather than the short route by Fu River (涪江).

In winter 416, the important city Luoyang fell to Liu Yu's general Tan Daoji (檀道濟).

Despite Yao Hong's large advantage in numbers, Shen Tianzi crushed him, forcing him to flee back to his capital Chang'an.

He continued to bestow great power (even if at times nominal) in his brother Liu Daolian and in his sons, in order to try to further affirm his authority.

In spring 420, Liu Yu, then at Shouyang (壽陽, in modern Lu'an, Anhui) sent his assistant Fu Liang to Jiankang to pressure Emperor Gong to yield the throne.

Emperor Gong responded by summoning Liu Yu back to the capital in summer 419, and Fu then offered him a draft of an abdication edict, requesting that he write it personally.

In fall 420, he posthumously honored his wife Zang Aiqin (臧愛親), who had died in 408, empress, and created his oldest son Liu Yifu crown prince.

Also, having seen how much damage bad reputation can do to people first hand, he ordered that those who had been labeled undesirables by public opinion be allowed new chances to show their worth.

In summer 422, Emperor Wu became extremely ill, and he entrusted Crown Prince Yifu to Xu Xianzhi, Fu Liang, Xie Hui, and Tan Daoji.