Ytterbium was discovered by J. C. G. of Marignac, in 1878, as an impurity in erbium oxide. The fraction of ytterbium isolated by Marignac contained small amounts of scandium and lutetium. The name of the element derives from the name of the Swedish city Ytterby and its feldspar extraction mine. It was in this mine that the ores containing the first discovered rare-earths were extracted.

The metallic ytterbium was isolated for the first time by Klemm and Bommer, in 1937, through the reduction of its tricloride with potassium. However, this sample was too impure, and it was only in 1953 that gram amounts of metallic ytterbium were prepared. Daane, Denison and Spedding got a sample, free of impurities, that used to study its physical and chemical properties.