After the 1968 season, Yamaha withdrew from World GP factory racing, but its passion for road racing was far from over. While supporting able riders in the GP125, 250 and 350 classes by improving production race machines and introducing special parts and advanced developmental models, Yamaha took up a new challenge ― the development of a large-displacement 2-stroke racer.
Yamaha's sights were set on the two pinnacle classes of road racing ― the GP500 and the Formula 750 (F750) prominent in races like the Daytona 200. Two models were developed simultaneously for the benefits of development efficiency and because securing technological reliability would be easier. Fitting two TR/TD engines side by side, Yamaha developed a 500cc and 700cc in-line four.
In 1973, with the completion of its first-generation YZR500 (0W20) and the YZR250 (0W17) based on a new TZ250 production racer, Yamaha returned to World GP to compete in two classes. Yamaha's riders were Jarno Saarinen, winner of the previous year's GP250 title, and Hideo Kanaya, who dominated the 1971 All Japan Road Race Championship in the 251cc and over class. Together, these two riders surprised everyone with their success on the new Yamaha machines.
At the French GP, the curtain-raiser for the season, Saarinen won both classes, while Kanaya notched up a 3rd place in the 500cc class against Phil Read and Giacomo Agostini (MV Agusta) and a 2nd in the 250 class. In the second round held in Australia, Saarinen and Kanaya achieved 1-2 finishes in both classes. And in the third round in West Germany, the pair raced up a storm, notching up a third consecutive 1-2 finish in the 250cc class.
However, the end came all too suddenly and tragically. In the fourth GP of the season held in Italy, Saarinen was killed in a pile-up just after the start of the 250cc event. Yamaha withdrew its factory team from all remaining races that year.
In 1974, Yamaha signed Giacomo Agostini as one of its riders and resumed factory activities, introducing two new factory machines: the YZR500 (0W20) adopting a Monocross suspension and the TZ350-based YZR350 (0W16). Agostini, who ranked no higher than 4th in the 500cc class, proved his credentials by comfortably taking the title in the 350cc class. Moreover, in 1975, Agostini took back the championship on a YZR500 (0W23) that had undergone a full model change, while Hideo Kanaya achieved his first win in the 500cc class and a series ranking of 3rd. In addition, Johnny Cecotto also helped celebrate Yamaha's 20th anniversary with success by winning the 350cc class title.
In 1976, however, Yamaha took a year off from factory racing as the company worked to recover from the financial woes inflicted by the oil shock. In 1977, Yamaha returned to GP racing with Johnny Cecotto, Agostini and newly-signed Steve Baker. All three rode the new-design YZR500 (0W35). Although Baker put up a good fight to achieve a No. 2 ranking, Yamaha was not able to win back the title.
Meanwhile, Suzuki, fielding ace rider Barry Sheene, won the 500cc class title two years in a row. The introduction of the RG500 production racer was also a success, and Suzuki became a true force to be reckoned with on the circuit. Nonetheless, Yamaha was determined to wrest back the title and had two aces up its own sleeve. These were the new model YZR500 (0W35K), which featured the Yamaha Power Valve System (YPVS), and "King" Kenny Roberts, two-time Grand National Champion of the USA's AMA. Roberts had joined the Yamaha GP team in 1978 and his experience and confidence grew with every race. With his characteristic "hang-off" riding style, he took four wins in his first year. The in-line-four YZR500 had reached a state of new competitiveness and in the hands of "King" Kenny it was an awesome force on the track that enabled him to achieve the remarkable feat of winning three consecutive titles through 1980.