Yi Deokhye was born as the daughter of Yang Gwiin (later Lady Boknyeong) and the then-60-year-old Emperor Emeritus Gojong on 25 May 1912, nearly two years after the Japanese annexation of Korea.

In 1917, her father persuaded Terauchi Masatake, the then-ruling Governor-General of Korea, to enter her name into the registry of the imperial family, offering her legitimacy and granting her the title of princess.

In the spring of 1930, upon the onset of a psychological condition (manifested by sleepwalking), she moved to King Yi's Palace, the Tokyo house of her brother, Crown Prince Eun.

In May 1931, after "matchmaking" by Empress Teimei, the consort of Emperor Taishō of Japan, Princess Deokhye married Count Sō Takeyuki (武志; 1908–1985), a Japanese aristocrat.

With the defeat of Japan in World War II, Korea once again became independent and her husband lost his noble title, as the Japanese peerage was abolished.

As Deokhye continued to be in a poor health condition, and after having permission from Crown Prince Uimin, Sō Takeyuki eventually divorced in 1955; he later remarried to a Japanese woman named Yoshie Katsumura who he had three children with.

Having suffered an unhappy marriage, Deokhye's grief was compounded by the loss of her only daughter, who disappeared on 26 August 1956 in Yamanashi-ken, reportedly committing suicide due to the stress of her parents' divorce.

[6] At first, the South Korean government refused to allow the return of the last royal bloodline, because President Rhee Syng-man wanted to avoid political chaos.

[citation needed] She cried while approaching her motherland, and despite her mental state, accurately remembered the complex royal court etiquette and protocol.

The princess reunited with her kindergarten and elementary school classmate, Min Yong-ah (민용아; 閔龍兒), and her 72-year-old wet nurse, Byeon Bok-dong (변복동; 卞福童; 1890–?

[7] After meeting her sister-in-law, Empress Sunjeonghyo, the second wife of her older half-brother Emperor Sunjong, she was admitted to Seoul National University Hospital later that day for surgery to remove a polyp in the uterus.

[8] Despite being born in Korea, the princess was able to restore her Korean citizenship and finalized her name, Yi Deok-hye, on 8 February 1962, and was soon discharged from the hospital as her condition was proven stable on 4 May 1964.