In 1787, part-time chemist Carl Axel Arrhenius found a heavy black rock in an old quarry near the Swedish village of Ytterby (now part of the Stockholm Archipelago). Thinking it was an unknown mineral containing the newly discovered element tungsten, he named it ytterbite and sent samples to various chemists for analysis.
Johan Gadolin at the University of Åbo identified a new oxide (or "earth") in Arrhenius sample in 1789, and published his completed analysis in 1794. Anders Gustaf Ekeberg confirmed the identification in 1797 and named the new oxide yttria. In the decades after Antoine Lavoisier developed the first modern definition of chemical elements, it was believed that earths could be reduced to their elements, meaning that the discovery of a new earth was equivalent to the discovery of the element within, which in this case would have been yttrium'.
Friedrich Wöhler is credited with first isolating the metal in 1828 by reacting a volatile chloride that he believed to be yttrium chloride with potassium.
In 1843, Carl Gustaf Mosander found that samples of yttria contained three oxides: white yttrium oxide (yttria), yellow terbium oxide (confusingly, this was called erbia at the time) and rose-colored erbium oxide (called terbia at the time). A fourth oxide, ytterbium oxide, was isolated in 1878 by Jean Charles Galissard de Marignac. New elements were later isolated from each of those oxides, and each element was named, in some fashion, after Ytterby, the village near the quarry where they were found (see ytterbium, terbium, and erbium). In the following decades, seven other new metals were discovered in "Gadolin's yttria". Since yttria was found to be a mineral and not an oxide, Martin Heinrich Klaproth renamed it gadolinite in honor of Gadolin.
Until the early 1920s, the chemical symbol Yt was used for the element, after which Y came into common use.
In 1987, yttrium barium copper oxide was found to achieve high-temperature superconductivity. It was only the second material known to exhibit this property, and it was the first-known material to achieve superconductivity above the (economically important) boiling point of nitrogen.