Yates was born in Albany, New York. He met Custer in Monroe, Michigan, and they became close personal friends. During the American Civil War, Yates was a second lieutenant in the 4th Michigan Infantry. Custer helped him secure a position on General Alfred Pleasonton's staff. Yates earned several brevet promotions in rank for his actions during the war. He fought at the First Battle of Manassas, Antietam, Fredericksburg, and Gettysburg.