Born in Osaka in 1587 as the son of Koide Yoshimasa, a cousin of Toyotomi Hideyoshi. In 1604, when his father moved to Kishiwada Castle in Izumi, Yoshihide was granted the 60,000-koku Izushi domain in Tajima and relocated his seat from the mountaintop Arikoyama Castle to a new castle built at the foot of the mountain — Izushi Castle. During the Winter Siege of Osaka in 1614 he refused overtures from the Toyotomi side and remained loyal to the Tokugawa; in the following Summer Siege, after the Battle of Kashii, he distinguished himself in the fighting at the fall of Osaka Castle, claiming 107 enemy heads. In his later years he became a devout follower of the Zen monk Takuan Soho, a native of Izushi, and is said to have helped restore the temple Sokyoji. He died in 1666 at the age of 80.

Though related by blood to the Toyotomi, he was a pragmatist who kept his loyalty firmly with the Tokugawa during the Siege of Osaka. In his later years he showed deep religious devotion, becoming a devoted follower of Takuan Soho.

By relocating his seat from Arikoyama Castle to the foot of the mountain and building Izushi Castle, he laid the foundation for a castle town that would serve as the political center of Tajima's Izushi region for more than 260 years. Present-day Izushi, known as the "Little Kyoto of Tajima," still preserves the layout of the castle and town he established.