Yifan Hou started playing chess at age 6, and in 2003 she won the U10 Girls division of the World Youth Championships in Halkidiki, Greece. In 2004, she contested the Boys' U10 World Championship in Heraklio, Crete, placing third. She came fifth in the 3 Arrows Cup in 2005 in Jinan, recording a performance rating of nearly 2400. At the age of 12, she contested the FIDE Women's World Championship (2006) in Ekaterinburg, Russia, defeating Nadezhda Kosintseva and Natalia Zhukova in the first two rounds before falling to Nino Khurtsidze in the third round.

Yifan played in the 37th Chess Olympiad: Women (2006) on the Reserve Board (Board 4), winning the silver medal with 11/13 and a performance rating of 2596. She scored 9/12 in the World Junior Championship (Girls) (2006) and secured second place on countback behind Yang Shen. In June 2007 she broke through to win the Women's Chinese National Chess Championship in Chongqing city, a title she successfully defended in Beijing the following May. In 2008 she also won the Isbank Ataturk Women Masters (2008) outright by a clear point ahead of Pia Cramling, and came third in the World Junior Championship (2008) (for both sexes) behind Abhijeet Gupta and Parimarjan Negi .

As a WFM, her rating topped 2500 in the January 2007 FIDE ratings before FIDE formally conferred her WGM title in late January 2007. Her results in the Aeroflot Open (2008) and the Isbank Ataturk Women Masters (2008) have provided her with her first and second GM norms. She picked up her third GM norm in the World Junior Championship (2008) with a round to spare. Any lingering doubts about Yifan's GM norm from the Isbank Ataturk Masters were resolved when she acquired another GM norm upon defeating Koneru Humpy to reach the final of the Women's World Championship (2008).