The Yale romanization of Mandarin was developed in 1943 by the Yale sinologist George Kennedy to help prepare American soldiers to communicate with their Chinese allies on the battlefield. Rather than try to teach recruits to interpret the standard romanization of the time for Mandarin, the Wade–Giles system, a new system was invented that utilized the decoding skills that recruits would already know from having learned to read English, i.e. it used English spelling conventions to represent Chinese sounds.
It avoided the main problems that the Wade–Giles system presented to the uninitiated student or news announcer trying to get somebody's name right in a public forum, because it did not use the spiritus asper (which looks like an apostrophe) to distinguish non-aspirated from aspirated initial sounds, such as jee from chee. In Wade–Giles, the first of those would be written chi and the second would be written ch'i. In the Yale romanization they were written ji and chi.
The Yale system also avoids the difficulties faced by the beginner trying to read pinyin romanization, which uses certain Roman letters and combinations of letters in such a way that they no longer carry their expected values. For instance, q in pinyin is pronounced something like the ch in chicken and is written as ch in Yale Romanization. Xi in pinyin is pronounced something like the sh in sheep, but in Yale it is written as syi. Zhi in pinyin sounds something like the ger in gerbil, and is written as jr in Yale romanization. For example: in Wade–Giles, "knowledge" (知識) is chih-shih; in pinyin, zhishi; but in Yale romanization it is written jr-shr—only the last will elicit a near-correct pronunciation from an unprepared English speaker.
The Yale romanization was widely used in Western textbooks until the late 1970s; in fact, during the height of the Cold War, preferring the Communist pinyin system over Yale romanization was something of a political statement. The situation was reversed once the relations between the People's Republic of China and the West had improved. Communist China (PRC) became a member of the United Nations in 1971 by replacing Nationalist China (ROC). By 1979, much of the world adopted pinyin as the standard romanization for Chinese geographical names. In 1982, pinyin became an ISO standard. Interest in Yale Mandarin declined rapidly thereafter.
The tables below show the Yale Mandarin representation of each Chinese sound (in bold type), together with the corresponding IPA phonetic symbol (in square brackets), and equivalent representations in Zhùyīn Fúhào (Bōpōmōfō) and Hànyǔ Pīnyīn.
In the Cold War era, the use of this system outside China was typically regarded as a political statement, or a deliberate identification with the Chinese communist regime. (p390)