The game began as a licensed port of the Cinematronics arcade game Star Castle. In the original game, a powerful cannon is protected by three layers of counter-rotating shields. The player must shoot holes in these shields in order to destroy the cannon inside. But once these holes are made, the cannon can also shoot out at the player. If the outermost layer is completely destroyed, new layers of shields are grown. Harassing the player are three free roaming mines that hunt out the player's ship.

As the Atari version grew, change after change was introduced until the final product had very little resemblance to the original. In this game, the hero (a Yar) is an insect-like creature who must nibble or shoot through a barrier in order to fire his Zorlon Cannon into the breach and destroy the evil Qotile, which exists on the other side of the barrier. The Qotile can shoot at the Yar even if the barrier is undamaged, by turning into the Swirl. The player is warned before the shot is fired, and he can retreat to a safe distance to dodge the enemy's energy blast. Also in the game is a safe area called the neutral zone, where the pursuing enemy torpedo cannot harm him (although the Swirl can). The Yar cannot shoot from within the neutral zone.

Each level ends with the destruction of the Qotile or Swirl. Odd-numbered levels will have a stationary shield protecting the Qotile, even-numbered levels will have a rotating shield protecting the Qotile. The destroyer missile will follow the player faster as levels progress.

Comic book and album

As with several other video games for the 2600 system, a miniature comic book was included in the game package, illustrating the story behind Yars' Revenge. The comic book explained the "revenge" of the game's title: that the Yars were avenging the destruction of one of their worlds, Razak IV. The Yar race and the planet Razak were named after Ray Kassar, CEO of Atari at the time.

Atari also released an album, under the label Kid Stuff Records, which contained a theme song and a radio drama-style reading of an expansion of the story in the comic book. A different, 7" recording explained the tragedy that revealed that a Yar could use himself to target the Zorlon Cannon rather than eating from the barrier. Both recordings were produced by John Braden.

The game has an Easter egg. After killing the Swirl in mid-air, a black vertical line will appear on the screen across the spot where the Swirl was shot (the line is referred to in the manual as the "Ghost of Yars" and warns the player to stay off its "mean streak"). If the player moves vertically along that line and is slightly below the middle of the screen when the explosion closes, the game will end and go into the Game Select screen with programmer's initials, HSW, shown both forwards and backwards in place of the word Select. In game 6 or 7, JOV appears when this trick is performed, under the creator's initials.

In 1999, a Game Boy Color version was developed by Vatical Entertainment and released by Telegames. A version was created in 2005 for the Atari Flashback 2 system. There was also a 3-in-1 cartridge released for the Game Boy Advance in 2005, published by DSI Games. This title also featured Pong and Asteroids. The game was made available through Xbox's Game Room in 2010.

A reimagining was released as a downloadable title on April 12th, 2011 on Xbox Live Arcade and on April 28, 2011 for Microsoft Windows. It is still pending release for the PlayStation 3. It was developed by Killspace Entertainment and published by Atari. In this version, the titular Yar has been reimagined as a humanoid female in mechanized power armor.

Another remake, a prequel to the original, Yars' Revenge: First War was released as a part of the Atari GO initiative on April 8th, 2011 on Facebook. It was developed by Baboom Games and published by Atari. This version is an arcade social game reminiscent of the original Atari 2600 game. This version has been acclaimed by remaining faithful to the original and still offering new innovative content.

Another reimagining, playable for free on web browsers supporting HTML5, has been released on Atari.com along with a number of other classic Atari games.

In 2005, a sequel to the original Yar's Revenge titled Yars' Return was released on the Atari Flashback 2.