After Munenori YAGYU's death (the forefather of the domain), because the territory of 12,500 koku was divided into 8,300 koku for the well known Mitsuyoshi YAGYU (Jubei) the first son, 4,000 koku for Munefuyu YAGYU the third son and 2,000 koku for Retsudo Gisen, the Yagyu clan became hatamoto (direct retainers of the bakufu, which is a form of Japanese feudal government headed by a shogun) from daimyo (Japanese feudal lord).
藩祖である柳生宗矩の死後、1万2500石の所領は、有名な長男の柳生三巌（十兵衛）に8300石、三男の柳生宗冬に4000石、四男の六丸（列堂義仙）に200石、と分知されたため、柳生氏は大名から旗本となった。