His younger brother Liu Xiu, however, would eventually found the Eastern Han dynasty.
Liu Yan was the sixth generation descendant of Emperor Jing of the Western Han dynasty.
Liu Yan was ambitious, and ever since Wang Mang usurped the Han throne in 9 AD establishing the Xin dynasty, Liu Yan was constantly considering starting a rebellion to restore the Han dynasty.
He planned, along with his brothers, and Li Tong (李通) and his cousin Li Yi (李軼), to kidnap the governor for Nanyang Commandery (modern Nanyang, Henan) and call for the people of the commandery to join him.
Encouraged, Liu Yan launched a frontal assault against Wancheng (宛城), the capital of Nanyang Commandery but suffered a major defeat.
The other rebel leaders chose rebel leader, Liu Xuan, a third cousin of Liu Yan, who had taken the title General Gengshi (更始將軍) and who was considered a weak personality, and requested that he be made emperor.
The other rebel leaders dismissed this suggestion, and in early 23 AD, Liu Xuan was proclaimed the Gengshi Emperor.