Liu Yu's ancestral home was in Tan County, Donghai State, which is around present-day Tancheng County, Shandong. His ancestor was Liu Jiang, a son and heir apparent of Emperor Guangwu who was deposed in 43 CE and became the Prince of Donghai. His grandfather Liu Jia served as Minister of the Household, while his father Liu Shu served as the Administrator of Danyang Commandery. Liu Yu held various appointments in the Han government during the reign of Emperor Ling, including Chancellor of Ganling State, Minister of the Imperial Clan, Inspector of You Province and Grand Commandant. During his tenure, he gained a strong reputation for good, incorrupt and benevolent governance. Even the ethnic minority tribes in You Province and foreign kingdoms near the Han Empire's northern borders so highly respected him that they did not dare to cause trouble in his jurisdiction. In recognition of his efforts, the Han government enfeoffed him as the Marquis of Xiangben. In the 190s, Liu Yu and another warlord Gongsun Zan got into conflict because of opposing views on how to deal with the ethnic minority tribes and foreign kingdoms: Liu Yu adopted a peaceful and pacifist policy towards them, while Gongsun Zan preferred to use armed force to keep them under control. In 193, Liu Yu rallied an army of about 100,000 and prepared to attack Gongsun Zan. He instructed his troops to focus on eliminating Gongsun Zan and keep casualties and damage as low as possible. However, one of his subordinates, Gongsun Ji, betrayed him and told Gongsun Zan about his plan. Due to Liu Yu's approach of minimising casualties and damage, he lost the battle against the more aggressive Gongsun Zan and was forced to retreat to Juyong County. Gongsun Zan attacked Juyong County, conquered it within three days, captured Liu Yu and brought him as a prisoner to Ji County. Around the time, the Han central government had sent an emissary, Duan Xun, to bestow additional honours upon Liu Yu and grant him authority to oversee affairs in the four provinces in northern China. Gongsun Zan seized the opportunity to coerce Duan Xun into transferring the titles and honours to him instead. After falsely accusing Liu Yu of plotting treason with Yuan Shao, Gongsun Zan forced Duan Xun to order Liu Yu's execution and bring Liu Yu's head back to the imperial capitalChang'an. Along the way, one of Liu Yu's former subordinates seized Liu Yu's head from Duan Xun and had it buried with the proper funeral rites. As Liu Yu was a highly popular and respected figure in You Province, many people mourned his death.
Family
Liu Yu's son, Liu He, served as a Palace Attendant. He was captured and held hostage by the warlordYuan Shu but later escaped to join Yuan Shu's half-brother, the warlord Yuan Shao. With backing from Yuan Shao, he and his father's former subordinates sought revenge against Gongsun Zan.
In ''Romance of the Three Kingdoms''
In the 14th-century historical novelRomance of the Three Kingdoms, when the Yellow Turban Rebellion breaks out in 184, Liu Yu is then serving as the Governor of You Province. His call for volunteers to assist government forces in suppressing the rebellion is the event which leads to Liu Bei, Guan Yu and Zhang Fei taking the Oath of the Peach Garden and forming their first militia to fight the rebels. This account, however, is historically inaccurate, as Liu Yu did not become the Inspector of You Province until 188.