The name of the village means "long island"[2][3][4] in Welsh and takes its name from a farm in the area, falling within the historic parishes of Ystradyfodwg and Llanwynno (Llanwonno).

[5] The community of Ynyshir lies between the small adjoining village of Wattstown and the larger town of neighbouring Porth.

[8] The initial development of the village began along the west bank of the Rhondda Fach river within the parish of Ystradyfodwg on the land occupied by Ynyshir farm, later followed by the development east of the river within the parish of Llanwonno on land owned by Maendy and Penrhiw farms.

[18] Between 1849 and 1856, the Taff Vale Railway opened the Maerdy Branch from Porth, including a station at Ynyshir.

In 2005, RCT council constructed the A4223 Porth and Lower Rhondda Fach Relief Road (Porth Bypass), which follows the old Rhondda Fach branch railway line through Ynyshir, past Wattstown and on to Pontygwaith.