Yanai attended Ube High School and later Waseda University, graduating in 1971 with a Bachelor's degree in Economics and Politics. In 1984, he opened his first Uniqlo store in Hiroshima. In the April 2009 issue of Monocle magazine, Yanai said, "I might look successful but I've made many mistakes. People take their failures too seriously. You have to be positive and believe you will find success next time."
Yanai won the International Retailer of Year award for 2010 from the National Retail Federation in US. He was the fourth Japanese national to win it, and the first since 1998, when it was won by Masatoshi Ito, owner and honorary chairman of the Ito Yokado retailing group. He was also chosen as best company president in a survey of Japanese corporate executives by Sanno Institute of Management in 2008 and 2009.