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The land on which the city is built was once part of a Dutch 24,000-acre (97-square-kilometer) land grant called Colen Donck. It ran from the current Manhattan-Bronx border at Marble Hill northwards for 12 miles (19 km), and from the Hudson River eastwards to the Bronx River. In July 1645, this area was granted to Adriaen van der Donck, the patroon of Colendonck. Van der Donck was known locally as the Jonkheer or Jonker (etymologically, "young gentleman", derivation of old Dutch jong (young) and heer ("lord"); in effect, "Esquire"), a word from which the name "Yonkers" is directly derived. Van der Donck built a saw mill near where the confluence of Nepperhan Creek and the Hudson. The Nepperhan is now also known as the Saw Mill River. Van der Donck was killed in the Peach War. His wife, Mary Doughty, was taken captive by Native Americans and later ransomed.

Near the site of Van Der Donck's mill is Philipse Manor Hall, a Colonial-era manor house owned by Dutch colonists. Today the manor is preserved and operated as a museum and archive, offering many glimpses into life before the American Revolution. The original structure (later enlarged) was built around 1682 by workmen and enslaved people for Frederick Philipse and his wife Margaret Hardenbroeck de Vries. Philipse was a wealthy Dutchman who by the time of his death had amassed an enormous estate, which encompassed the entire modern City of Yonkers, as well as several other Hudson River towns. Philipse's great-grandson, Frederick Philipse III, was a prominent Loyalist during the American Revolution. He had many economic ties to English businessmen, which also resulted in political ties. Because of his political leanings, he was forced to flee to England. The American colonists in New York state confiscated all the lands and property that belonged to the Philipse family and sold it.

For its first 200 years, Yonkers was a small farming town with an active industrial waterfront. Yonkers's later growth rested largely on developing industry. In 1853, Elisha Otis invented the first safety elevator and the Otis Elevator Company opened the first elevator factory in the world on the banks of the Hudson near what is now Vark Street. In the 1880s it relocated to larger quarters (now adapted and used as the Yonkers Public Library). Around the same time, the Alexander Smith and Sons Carpet Company (in the Saw Mill River Valley) expanded to 45 buildings, 800 looms, and more than 4,000 workers. It was known as one of the premier carpet-producing centers in the world.

The community was incorporated as a village in the northern part of the Town of Yonkers in 1854 and as a city in 1872. In 1874 the southern part of the town, including Kingsbridge and Riverdale, was annexed by New York City as part of The Bronx. In 1898, Yonkers (along with Brooklyn, Queens, and Staten Island) voted on a referendum to determine if they wanted to become part of New York City. While the results were positive elsewhere, the returns were so negative in Yonkers and neighboring Mount Vernon that those two areas were not included in the consolidated city and remained independent. Still, some residents call Yonkers "the Sixth Borough", referring to its location on the New York City border, its urban character, and the failed merger vote.

During the American Civil War, 254 Yonkers residents joined the US Army and Navy. They enlisted primarily in four different regiments. These included the 6th New York Heavy Artillery, the 5th New York Volunteer Infantry, the 17th New York Volunteers, and the 15th NY National Guard. During the New York City Draft Riots, Yonkers formed the Home Guards. This force of constables was formed to protect Yonkers from rioting that was feared to spread from New York City, but it never did. In total, seventeen Yonkers residents were killed during the Civil War.

From 1888, the New York City and Northern Railway Company (later the New York Central Railroad) connected Yonkers to Manhattan and points north. A three-mile spur to Getty Square operated until 1943.

Aside from being a manufacturing center, Yonkers played a key role in the development of sports recreation in the United States. In 1888, Scottish-born John Reid founded the first golf course in the United States, Saint Andrew's Golf Club, in Yonkers.

Bakelite, the first completely synthetic plastic, was invented in Yonkers circa 1906 by Leo Baekeland, and manufactured there until the late 1920s. Today, two of the former Alexander Smith and Sons Carpet Company loft buildings located at 540 and 578 Nepperhan Avenue have been repurposed to house the YoHo Artist Community. This collective group of artists works out of private studios there.

During World War I, a total of 6,909 Yonkers residents entered military service. This was approximately seven percent of the population.^:vi Most Yonkers men joined either the 27th Division or the 77th Division.^:6 In total, 137 Yonkers residents were killed during the war.^:77 Among the survivors of the USS President Lincoln, a Navy transport ship sunk during the war, were seventeen sailors from Yonkers.^:15

Civilians helped in the war effort by joining organizations such as the American Red Cross. In 1916, there were 126 people in the Yonkers chapter of the Red Cross. By the end of the war, 15,358 Yonkers residents were members of the chapter. Mostly women, they prepared surgical dressings, created hospital garments for the wounded, and knit articles of clothing for refugees and soldiers. Besides joining the Red Cross, residents of Yonkers donated to various war drives. The total amount raised for these drives was $19,255,255.^:23–24

Early in the 20th century, Yonkers also hosted a brass era automobile maker, Colt Runabout Company. Although the vehicle reportedly performed well, the company went under. Yonkers was the headquarters of the Waring Hat Company, at the time the nation's largest hat manufacturer. During World War II, the city's factories were converted to produce items for the war effort, such as tents and blankets by the Alexander Smith and Sons Carpet Factory, and tanks by the Otis Elevator factory. After World War II, however, increased competition from less expensive imports resulted in a decline in manufacturing in Yonkers, and numerous industrial jobs were lost. The Alexander Smith Carpet Company, one of the city's largest employers, ceased operation during a labor dispute in June 1954.

In 1983, the Otis Elevator Factory finally closed its doors. With the loss of such jobs, Yonkers became primarily a residential city. Some neighborhoods, such as Crestwood and Park Hill, became popular with wealthy New Yorkers who wished to live outside Manhattan without giving up urban conveniences. Yonkers's excellent transportation infrastructure, including three commuter railroad lines (now two: the Harlem and Hudson Lines), and five parkways and thruways, made it a desirable city in which to live. It is a 15-minute drive from Manhattan and has numerous prewar homes and apartment buildings. Yonkers's manufacturing sector has also shown a resurgence in the early 21st century.

On January 4, 1940, Yonkers resident Edwin Howard Armstrong transmitted the first FM radio broadcast (on station W2XCR) from the Yonkers home of C.R. Runyon, a co-experimenter. Yonkers had the longest running pirate radio station, owned by Allan Weiner, which operated during the 1970s through the 1980s.

In 1942, a short subway connection was planned between Getty Square and the IRT Broadway–Seventh Avenue Line, which terminates in Riverdale at 242nd Street slightly south of the city line. The plan was dropped.

In 1960, the Census Bureau reported Yonkers's population as 95.8% white and 4.0% black. The city's struggles with racial discrimination and segregation were highlighted in a decades-long federal lawsuit. After a 1985 decision and an unsuccessful appeal, Yonkers's schools were integrated in 1988. Federal judge Leonard B. Sand ruled that Yonkers had engaged in institutional segregation in housing and school policies for over 40 years. He tied the illegal concentration of public housing and private housing discrimination to the city's resistance to ending racial isolation in its public schools.^{[citation needed]}

In the 1980s and 1990s, Yonkers developed a national reputation for racial tension, based on a long-term battle between the city and the NAACP over the building of subsidized low-income housing projects in the city. The city planned to use federal funding for urban renewal efforts within Downtown Yonkers exclusively; other groups, led by the NAACP, believed that the resulting concentration of low-income housing in traditionally poor neighborhoods would perpetuate poverty. Although the City of Yonkers had been warned in 1971 by the United States Department of Housing and Urban Development against further building of low-income housing in west Yonkers, it continued to support subsidized housing in this area between 1972 and 1977.

Yonkers gained national/international attention during the summer of 1988, when it reneged on its previous agreement to build promised municipal public housing in the eastern portions of the city, an agreement it had made in a consent decree after losing an appeal in 1987. After its reversal, the city was found in contempt of the federal courts. Judge Sand imposed a fine on Yonkers which started at $100 and doubled every day, capped at $1 million per day by an appeals court, until the city capitulated to the federally mandated plan.

Yonkers remained in contempt of court until September 9, 1988. The City Council relented in the wake of having to close the library and cutback on sanitation measures because of paying the fines. It also was considering having to make massive city layoffs which would have adversely affected its ability to provide services to the upper classes it was trying to retain. First-term mayor Nicholas C. Wasicsko fought to save the city from financial disaster and bring about unity. Yonkers's youngest mayor (elected at age 28), Wasicsko struggled in city politics. It was scarred with the stigma of the "Balkanization of Yonkers". He succeeded in helping to end the city's contempt of the courts, but was voted out of office as a result. His story is the subject of a miniseries called Show Me a Hero, which aired on HBO in 2015. It was adapted from the 1999 nonfiction book of the same name by former New York Times writer, Lisa Belkin.^{[citation needed]}

A Kawasaki railroad cars assembly plant opened in 1986 in the former Otis plant. It produces the new R142A, R143, R160B, and R188 cars for the New York City Subway, and the PA4 and PA5 series for PATH.

In the 2000s, some areas of Yonkers that border similar neighborhoods in Riverdale, Bronx began seeing an influx of Orthodox Jews. Subsequently, Riverdale Hatzalah Volunteer Ambulance Service began serving some neighborhoods in the southwest section of the city. There is also a small Jewish cemetery, the Sherwood Park Cemetery.

As of the census of 2010, there were 195,976 people in the city. The population density was 10,827.4 people per square mile (4,187.5/km²). There were 80,839 housing units at an average density of 4,466.2 per square mile (1,727.3/km²). The racial makeup of the city was 55.8% White, 18.7% African American, 0.7% Native American, 5.9% Asian, 0.1% Pacific Islander, 14.7% from other races, and 4.1% from two or more races. 34.7% of the population were Hispanic or Latino of any racial background. Non-Hispanic Whites were 41.4% of the population in 2010, down from 89.9% in 1970.

According to the 2000 Census, 19.9% were of Italian and 11.6% Irish descent. 61.3% spoke only English at home; 22.7% spoke Spanish, 5% Arabic, 3.9% Italian, and 1.3% Portuguese at home. Yonkers has a sizeable Arab population, mainly from the Levant, especially Jordanian and Palestinian.

There were 74,351 households, out of which 30.9% had children under the age of 18 living with them in 2000, 44.2% were married couples living together, 17.2% had a female householder with no husband present, and 33.7% were non-families. 29.2% of all households were made up of individuals, and 11.9% had someone living alone who was 65 years of age or older. The average household size was 2.61 and the average family size was 3.23.

In 2000, the city the population was spread out, with 24.3% under the age of 18, 8.8% from 18 to 25, 30.6% from 25 to 45, 21.2% from 45 to 65, and 15.0% who were 65 years of age or older. The median age was 36 years. For every 100 females, there were 88.6 males. For every 100 females age 18 and over, there were 84.2 males.

The median income for a household in the city was $44,663 in 2000, and the median income for a family was $53,233. Males had a median income of $41,598 versus $34,756 for females. The per capita income for the city was $22,793. 15.5% of the population and 13.0% of families were below the poverty line. Out of the total population, 24.8% of those under the age of 18 and 9.9% of those 65 and older were living below the poverty line.