After the Battle of Sekigahara in 1600, the Uesugi were transferred from Aizu to Yonezawa, their holdings reduced to 300,000 koku. Yonezawa Castle became the new seat of the domain, and from here Kanetsugu, as chief administrator, directed the planning of the castle town, flood-control works along the Mogami River, and the promotion of industries such as ramie weaving. His achievement in sustaining the entire retainer corps and building the foundations of the domain's later prosperity is inseparable from the history of Yonezawa Castle.

Date Masamune was born at Yonezawa Castle in 1567, the stronghold of the Date clan, and spent his childhood here. Raised in this castle, he later conquered much of Ōshū, building a domain of over 1.7 million koku across southern Ōu. Yonezawa is still known today as his birthplace.

In 1591, Toyotomi Hideyoshi's Oshu Shioki sharply reduced Date Masamune's domain from 1.2 million koku in Aizu to 300,000 koku in Yonezawa. Masamune returned to this castle, his birthplace, and based himself here until moving to Sendai. Hideyoshi's ruling reshaped Tohoku's daimyo map and paved the way for the later Uesugi clan's arrival.