Mizuki Pass, located on the border with Kokonoe Town along Japan National Route 210, forms one of the central watersheds in Kyushu, separating the Ōita River water system on the Yufu City side and the Chikugo River water system on the Kokonoe Town side.

From the Heian period, the area was dominated by descendants of the kokushi of the province, the Ogami clan.

Following the Meiji restoration, the villages of Kitayufu and Minamiyufu within Hayami District, Ōita were established on May 1, 1889 with the creation of the modern municipalities system.

The city of Yufu was established on October 1, 2005, from the merger of the towns of Hasama, Shōnai, and Yufuin (all from Ōita District).

Yufu has a mayor-council form of government with a directly elected mayor and a unicameral city council of 20 members.

In terms of national politics, the city is part of the Ōita 2nd district of the lower house of the Diet of Japan.

The economy of Yufu is centered around agriculture and tourism it is many hot spring resorts.