Born April 1889 in Worthington, Indiana, learned about telegraphy from his father. Wanted to pursue a career as a lawyer took a job after high school as a railway telegrapher.
In 1912, took a job with the State Department as a telegraph operator. Seemed fascinated with codes and often decoded messages for President Woodrow Wilson. Argued that the President's coded messages were easy to break and that the coding mechanism was hopelessly outdated. Wrote a 100 page report to report his conclusion title Exposition on the Solution of American Diplomatic Codes.
Was moved to the U.S. War Department in 1917 as the United States had entered World War I. Was given the rank of lieutenant and assigned to the U.S. Signal Corps where he was named head of theMI8 (Military Intelligence, Section), a section devoted to cryptology. Was assigned the task of cracking the German diplomatic codes and was successful, leading to the prosecution of German saboteurs, including Lothar Witzke.
Traveled to Europe and met with MI5 chief Vernon Kell and the chief of British Naval intelligence Admiral William Reginald Hall. Also met with French cryptologists to compare tactics.
At the end of World War I, Yardley's section was designated to be disbanded. Yardley and General Marlborough Churchill, the head of Army Intelligence, insisted that the section was essential to diplomatic relations during peacetime. In order to diffuse attention on the group, the operation was moved to New York City, where they operated out of a brownstone.
The group was able to break the codes of the Cheka, the Russian secret police but was most renowned for the breaking of the Japanese diplomatic codes. The United States was embroiled in negotiations with Japan at the 1921 Washington Naval Conference, determining the allowable tonnage for naval warship for major military powers. The United States argued that the ratio should be 10:6 in favor of the U.S. over Japan. Japan insisted on a minimum of 10:7, but Yardley's group broke diplomatic codes allowing the U'S. to learn that the Japanese would accept 10:6 as a final compromise. The U'S. stood firm and the Japanese eventually agreed to the10:6 ratio.
In 1924, U.S. President Calvin Coolidge ordered a sharp cutback on federal spending and five years later, Henry Stimson, President Herbert Hoover's Secretary of State, deemed Yardley's section as non-essential. Stimson, highly offended at how diplomatic messages were being intercepted, reportedly declared "Gentlemen do not read each other's mail," and ordered State Department funding of Yardley's group to cease immediately. Yardley's group, officially called the Cipher Bureau but also known as the American Black Chamber was thus shut down.
Ousted from the intelligence community, Yardley grew frustrated and angry at U.S. naivety as well as his shabby treatment. In 1931, he published a book called The American Black Chamber. The book detailed his experiences in breaking codes and gave detailed explanations of the breaking of the Japanese codes. The book was serialized in the Saturday Evening Post, gaining fame and wealth for Yardley. It also caused him to fall into further disfavor with the U.S. Government and members of the intelligence community. In reaction to his book, Congress passed a bill prohibiting the publication of government secrets, including diplomatic codes and the bill was signed into law by President Franklin Roosevelt in 1933.
Yardley tried at several other ventures, including selling invisible ink to government agencies but once again returned to writing, authoring a manuscript called Japanese Diplomatic Secrets, but the book was seized by federal authorities before it reached the printing press. He next wrote of espionage-oriented comedy called The Blonde Countess which was later made into a popular movie starring William Powell and Rosalind Russell. He also penned another novel called The Red Sun of Nippon.
Although still ostracized in the U.S. intelligence community, he was welcomed in other countries. He Traveled to China where he worked with Morris "Two-Gun" Cohen. helping to coordinate intelligence matters under Chiang Kai-shek in China's was against Japan. He also was recruited by Canadian authorities to help them establish a code-breaking operation for the Canadian government.
After the United States entered World War II, Yardley returned to the United States where he obtained a job with the federal government but was kept out of cryptology matters and instead assigned to the Office of Price Administration.
After the end of World War II, Yardley, an avid poker player, wrote a book called The Education of a Poker Player. He died a year later, the father of modern cryptology.