The Yellow Medicine River issues from Lake Shaokatan in Shaokatan Township in western Lincoln County, approximately six miles (9.7 km) southwest of Ivanhoe, on the Coteau des Prairies, a morainic plateau dividing the Mississippi and Missouri River watersheds.

It flows into the Minnesota River in Upper Sioux Agency State Park in Sioux Agency Township, approximately eight miles (13 km) southeast of Granite Falls, after dropping 85 feet (26 m) in its final ten miles (16 km) in the Minnesota River valley.

Other tributaries of the Yellow Medicine include Spring Creek, 46 miles (74 km) long, which flows eastwardly through Yellow Medicine County; and Mud Creek, 31 miles (50 km) long, which flows eastwardly through western Yellow Medicine County into northwestern Lyon County.

According to the agency, 81% of the land in the Yellow Medicine-Hawk Creek watersheds is used for agriculture, with corn and soybeans being the predominant crops.

At the United States Geological Survey's stream gauge near Granite Falls, 6 miles (9.7 km) upstream from the river's mouth, the annual mean flow of the river between 1931 and 2005 was 142 cubic feet per second (4 m³/s).