In November 1936, Kuomintang chairman Chiang Kai-shek flew to Xi'an in early December to speak to troops under the command of Yang and Zhang who no longer wanted to fight the CCP.

On the night of December 12, 1936, bodyguards of Yang and Zhang stormed the cabin where Chiang was sleeping and attempted to arrest him.

[4]: 8938 Shortly after the Communist capture of Nanking (Nanjing) near the end of the Chinese Civil War, the KMT army prepared to abandon Chongqing where Yang was imprisoned.

[4]: 9004  Some of Yang's officers were killed in November that same year,[5] shortly before the CCP's capture of Nanjing near the end of the Chinese Civil War.

After interrogation and public trial by the Chongqing Intermediate People's Court, he was sentenced to death and executed immediately.