The name is derived from Yazdegerd I, a Sassanid ruler of Persia. The city was definitely a Zoroastrian center during Sassanid times. The word yazd means God. After the Arab conquest of Iran, many Zoroastrians migrated to Yazd from neighboring provinces. By paying a levy, Yazd was allowed to remain Zoroastrian even after its conquest, and Islam only gradually became the dominant religion in the city.
Because of its remote desert location and the difficulty of access, Yazd remained largely immune to large battles and the destruction and ravages of war. For instance, it was a haven for those fleeing from destruction in other parts of Persian Empire during the Mongol invasion. In 1272 it was visited by Marco Polo, who remarked on the city's fine silk-weaving industry. In the book The Travels of Marco Polo, he described Yazd in the following way:
It is a good and noble city, and has a great amount of trade. They weave there quantities of a certain silk tissue known as Yasdi, which merchants carry into many quarters to dispose of. When you leave this city to travel further, you ride for seven days over great plains, finding harbour to receive you at three places only. There are many fine woods producing dates upon the way, such as one can easily ride through; and in them there is great sport to be had in hunting and hawking, there being partridges and quails and abundance of other game, so that the merchants who pass that way have plenty of diversion. There are also wild asses, handsome creatures. At the end of those seven marches over the plain, you come to a fine kingdom which is called Kerman.
Yazd briefly served as the capital of the Muzaffarid Dynasty in the fourteenth century, and was unsuccessfully besieged in 1350–1351 by the Injuids under Shaikh Abu Ishaq. The Friday (or Congregation) mosque, arguably the city's greatest architectural landmark, as well as other important buildings, date to this period. During the Qajar dynasty (18th century AD) it was ruled by the Bakhtiari Khans.
Under the rule of the Safavid (16th century), some people migrated from Yazd and settled in an area that is today on the Iran-Afghanistan border. The settlement, which was named Yazdi, was located in what is now Farah City in the province of the same name in Afghanistan. Even today, people from this area speak with an accent very similar to that of the people of Yazd.
One of the notable things about Yazd is its family-centered culture. According to official statistics from Iran's National Organization for Civil Registration, Yazd is among the three cities with the lowest divorce rates in Iran.
The majority of people in Yazd are Muslims. There is also a sizable population of Zoroastrians in the city. In 2013, Sepanta Niknam was elected to the city council of Yazd and became the first Zoroastrian councillor in Iran. There was once a relatively large Jewish-Yazdi community, however, after the creation of Israel, many have moved there for varying reasons. Former president of Israel Moshe Katsav is an example.
The Pir-e-Naraki sanctuary is one the important pilgrimage destinations for Zoroastrians where an annual congregation is held and frequent visits are made during the year; it is now also a famous tourist spot.
Several other city traditions are the Muslim parades and gatherings, which are mainly processions called azadari held to commemorate the events experienced by the main Islamic martyrs and other important figures. These huge public gatherings created a series of spaces which, since most are near important urban monuments, are used at other times as hubs from which visitors can tour the main spots in the city
Always known for the quality of its silk and carpets, Yazd today is one of Iran's industrial centers for textiles. There is also a considerable ceramics and construction materials industry and unique confectionery and jewellery industries. A significant portion of the population is also employed in other industries including agriculture, dairy, metal works, and machine manufacturing. There are a number of companies involved in the growing information technology industry, mainly manufacturing primary materials such as cables and connectors. Currently Yazd is the home of the largest manufacturer of fibre optics in Iran.
Yazd's confectioneries have a tremendous following throughout Iran and have been a source of tourism for the city. Confectioners workshops (khalifehs, or experts) keep their recipes a guarded secret, and there are many that have remained a private family business for many generations. Baklava, ghotab and pashmak are the most popular sweets made in the city.
In 2000 the Yazd Water Museum opened; it features exhibits of water storage vessels and historical technologies related to water.
Yazd has expanded its industrial fields since the 1980s. With at least three main industrial areas each containing over 70 different factories, Yazd has become one of the most technologically advanced cities of Iran. The most famous corporations include Yazd Steel, Shimi Plastic of Yazd, and Yazd Polymer.