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Born in 1571 in Yagyū-no-Shō, Yamato Province (modern Nara Prefecture), he studied the Shinkage school of swordsmanship under his father Sekishūsai (Yagyū Munetoshi) and served as swordsmanship instructor to the shogunal house across three generations — Tokugawa Ieyasu, Hidetada, and Iemitsu. He was appointed Ieyasu's swordsmanship instructor in 1603 and was raised to the rank of daimyo, receiving a domain of ten thousand koku. As a close aide to Shogun Iemitsu he also concurrently served as Ōmetsuke (Inspector General), overseeing the surveillance of the various daimyo. He composed the Heihō Kadensho (1632), integrating swordsmanship with Zen, and pursued the realm of "sword-Zen unity" (kenzeni-itchi). He advocated the philosophy of the "life-giving sword" (katsujinken — the sword that gives life, rather than taking it). His son Jūbei Mitsuyoshi (Yagyū Jūbei) is known as a legendary swordsman. He died in 1646 at age 76. He is characterised by a thinker's dimension, elevating swordsmanship from mere martial art to spiritual cultivation.

A profound thinker who sought the essence of humanity through the way of the sword. His philosophy of the life-giving sword — "the sword is not a tool for killing people, but a path that gives people life" — embodied the spiritual cultivation of sword-Zen unity. He was a complex person in whom a practical politician's side, earning the shogun's trust and serving as Inspector General, coexisted with a spiritual seeker's side. He also had the creativity to build an original philosophical system while inheriting his father Sekishūsai's tradition.

The Yagyū Shinkage school of swordsmanship is inherited to this day as a school of kendo and martial arts, and many historic sites associated with the Yagyū family survive in the Yagyū district of Nara Prefecture. The Heihō Kadensho is highly regarded both as a treatise on swordsmanship and as a work of Zen spirituality, and is quoted in modern business books and self-help books. His son Yagyū Jūbei is widely beloved today as the protagonist of kōdan storytelling, novels, films, and dramas.