His father, Brahmarath and mother Sunanda lived in Chamatkarpur, known today as Vadnagar, in north Gujarat. Yagnavalkya was brilliant from childhood. During childhood he studied the Rig Ved a under Shakalya rishi. Everyday Shakalya would send one of his pupils to the local king’s palace to perform a yagna. Once it was Yagnavalkya’s turn. While sprinkling rice grains in the yagna, some grains fell on wooden logs nearby. After Yagnavalkya left, the king was startled to see green leaves sprout on the dry wooden logs! So he requested Shakalya to send Yagnavalkya again the next day. The young scholar refused because the king was big-headed. The guru became angry and ordered Yagnavalkya to give back all the knowledge he had obtained from him. Yagnavalkya obeyed without arguing. He vomited the knowledge and left Shakalya. The other pupils, eager for this knowledge, turned themselves into tetar birds and licked up the ‘knowledge’. Hence this branch of knowledge came to be known as Taittiriya – from tetar.

Once the local king performed a yagna. After it ended he wished to gift one thousand cows, with five gold coins hanging on each horn of every cow! This was an astonishing amount of treasure then. However, he put a condition that he would gift the cows only to whoever was declared as the greatest brahmanisth rishi among those present. Yagnavalkya got up calmly and instructed one of his pupils to take the cows! This caused a great uproar among the other rishis. “How dare he?” “Who does he think he is?” “What a cheek!” The rishis cried out aloud to each other. One of them, named Ashwal, challenged Yagnavalkya, “Do you think you are the greatest brahmanishth?”

“I am the dust at the feet of the greatest brahmanishth,” replied Yagnavalkya humbly. “However, I want these cows so I have taken them!”
Ashwal then fired off a long series of difficult questions. Yagnavalkya answered them correctly. Ashwal sat down, accepting defeat. Other rishis also debated with Yagnavalkya. He defeated them as well. Everybody remained silent. “Nobody can beat him,” they thought. “He’ll get all the cows and the gold.” Finally a female rishi named Gargi challenged him. She fired off very difficult questions, which Yagnavalkya answered easily. When she asked a question about what was above Brahmalok, Yagnavalkya warned her not to meddle about that. She then asked about Aksharbrahma and he answered. Gargi then declared, “I proclaim Yagnavalkya as the greatest brahmanishth!” All those present now agreed wholeheartedly. And so Yagnavalkya rightfully took all the cows!

Yagnavalkya had two wives, Maitreyi and Katyayani. Once in his old age he decided to retire into the forest to spend his life doing tapas and meditation. He distributed his wealth equally to both his wives. However Maitreyi, who was wiser, asked him, “Does one attain moksha with material objects? What shall I do with something that does not lead to moksh ? I wish for spiritual wisdom.”
Yagnavalkya was pleased with her wisdom and permitted her to accompany him to the forest. She also performed tapas and worshipped Surya deva. By his grace, she too obtained the wisdom of the Shukla Yajur Veda.

One of the most famous and important texts that Yagnavalkya wrote was the Yagnavalkya Smruti. Bhagwan Swaminarayan has considered this as one of the eight important texts in the Shikshapatri (93-95).