In Montana the river has been used extensively for irrigation since the 1860s. In its upper reaches, within Yellowstone Park and the mountains of Montana, it is a popular destination for fly fishing. The Yellowstone is a Class I river from the Yellowstone National Park boundary to the North Dakota border for the purposes of stream access for recreational purposes.
The division of water rights to the entire Yellowstone River Basin among Wyoming, Montana and North Dakota, governed by a 1950 compact, was disputed in a 2010 lawsuit brought directly in the U.S. Supreme Court by Montana against Wyoming. Oral argument took place in January 2011. On May 2, 2011, the Court held 7-1 (by Justice Thomas, with Justice Scalia dissenting) that Montana had no valid claim for diminution of its water, since Wyoming was irrigating the same acreage as always, albeit by a more modern method that returned less runoff to go downstream to Montana. (A subsequent 2011 Supreme Court case, in which Montana asserted ownership of Missouri Basin riverbottoms, so as to collect decades of back rent from a hydropower company, is unrelated. On February 22, 2012, Montana lost that case too.)
The name is widely believe to have been derived from the Minnetaree Indian name Mi tse a-da-zi (Yellow Rock River) (Hidatsa: miʔciiʔriaashiish'). Common lore states that the name came from the yellow-colored rocks along the Grand Canyon of the Yellowstone, but the Minnetaree never lived along the upper stretches of the Yellowstone. Some scholars think that the river was named after yellow-colored sandstone bluffs on the lower Yellowstone, instead. The Crow Indians, who lived along the upper Yellowstone in Southern Montana, called it E-chee-dick-karsh-ah-shay (Elk River). Translating the Minnetaree name, Frenchtrappers called the river Roche Jaune (Yellow Rock), a name used by mountain men until the mid-19th century. Independently, Lewis and Clark recorded the English translation of Yellow Stone for the river, after encountering the Minnetaree in 1805. With expanding settlement by people from the United States, the English name eventually became the most widely used. The river was explored in 1806 by William Clark during the return voyage of the Lewis and Clark Expedition. Clark's Fork of the river was named for him.
The Yellowstone River had long been an important artery of transportation for Native Americans. In the 19th century, European-American settlers depended on it as well, entering the region by riverboat. The region around the Big Horn, Powder and Tongue rivers is the traditional summer hunting grounds for numerous Native American tribes: Lakota Sioux, Crow, Cheyenne and Cree. Gold was discovered near Virginia City, Montana in the 1860s, and two of the primary routes for accessing the gold fields were the Bozeman Trail and the Bridger Trail both of which followed the Yellowstone for a short length.
Native American anger at settler intrusion into the hunting grounds led to Red Cloud's War. The conflict was settled with the Treaty of Fort Laramie in 1868, by which the US granted the territory of the Black Hills and the Powder River Country to the Lakota people. This region included the drainages of the Big Horn, Powder and Tongue rivers. The discovery of gold in 1874 in the Black Hills, however, attracted thousands of miners who invaded the sacred grounds, and conflicts broke out with the Sioux.
The new competition and violence led to the Great Sioux War of 1876-77. The US sent in troops to protect the miners, although they had violated the treaty, and to defeat the Sioux. In 1876, Colonel John Gibbon led a column of men from Fort Ellis near Bozeman, Montana and traveled down the Yellowstone to meet up with General Alfred Terry's Dakota Column, which had traveled upstream from North Dakota. Terry formed a base of operations at the mouth of Rosebud Creek on the Yellowstone, but the US miscalculated the strength of the Lakota who had gathered by the thousands along the river. General George Armstrong Custer departed from Rosebud Creek with the 7th Cavalry on the expedition that ended in his complete defeat by the Lakota at the Battle of the Little Bighorn. The army ferried its survivors down the Yellowstone to Fort Abraham Lincoln on the Missouri River.
After the US achieved victory the tribes were forced onto reservations. The Sioux and allies were forced from eastern Montana and Wyoming: some bands fled to Canada, while others suffered forced removal to distant reservations, primarily in present-day South Dakota and Nebraska west of the Missouri River. Crow warriors had enlisted as scouts with the US Army during the war and the Crow Indian Reservation was established in south-central Montana. The Northern Cheyenne Indian Reservation is south of the Yellowstone in Montana.
Many of the early expeditions to the area that would later become Yellowstone National Park traveled along the Yellowstone River, including the Cook–Folsom–Peterson Expedition and the Washburn-Langford-Doane Expedition. In the early 1870s, the Northern Pacific Railroad attempted to extend rail service along the Yellowstone to Livingston from Bismarck, North Dakota, a route proposed to cross the last of the Lakota buffalo hunting grounds. This route was finally completed in 1883. By the early 20th century, Northern Pacific was providing train service along the river to the north entrance of the park near Gardiner.
An ExxonMobil pipeline which runs from Silver Tip, to Billings, Montana ruptured about 10 miles west of Billings on July 1, 2011 at about 10:40pm. The resulting spill leaked an estimated 1,500 barrels of oil into the Yellowstone River (equivalent to 63,000 gallons) for 56 minutes before it was shut down.
As a precaution against a possible explosion, officials in Laurel, Montana evacuated about 140 people on Saturday just after midnight, then allowed them to return at 4 a.m 
The Yellowstone River is considered to be one of the greatest trout streams of the world and is officially classed as a blue ribbon stream in Montana from the park to the confluence with the Boulder river east of Livingston and from the mouth of Rosebud creek near Rosebud, Montana to the North Dakota border. The lack of dams along the river provides for excellent trout habitat from high inside Yellowstone Park, downstream through Gardiner, the Paradise Valley, Livingston, and to Big Timber, a stretch of nearly 200 miles (320 km). The Yellowstone varies in width from 74 feet (23 m) to 300 feet (91 m), so fishing is normally done by boat. The most productive stretch of water is through Paradise Valley in Montana, especially near Livingston which produces brown trout, rainbow trout and native Yellowstone cutthroat trout as well as Rocky Mountain whitefish. From Billings downstream to the North Dakota border, anglers seek Burbot, Channel catfish, Paddlefish, Sauger, Smallmouth bass, and Walleye.
Yellowstone Lake to Yellowstone Falls
Yellowstone River, Fishing Bridge, July 1959
The river inside Yellowstone National Park provides accessible flat water fishing and abundant Yellowstone cutthroat trout. The portion of the river through the Hayden Valley is closed all year long, but the rest is accessible and easily wadable. No floating is allowed. Numerous insect hatches occur following the opening of the river on July 15 providing anglers the opportunity to try numerous artificial flies including Pale Morning Duns, Green Drakes, Gray Drakes, Caddis and salmonflies.
The canyon reaches inside Yellowstone National Park are accessible only by hiking or horseback. The river here is usually quite swift, with sheer canyon walls in spots. Below Knowles Falls, about four miles upstream from Gardiner, anglers will find browns and whitefish in addition to the rainbows and cutthroat trout.
This section of the Yellowstone holds a good population of medium-sized rainbow and cutthroat trout, with a few big browns as well. The first half of this section from Gardiner to the bridge at Corwin Springs is mostly fast water, with some class II and III white water. From Corwin Springs to Yankee Jim Canyon, the river flattens out substantially and gives the angler more time to cast to fish along the banks.
Yankee Jim Canyon
Upper Yankee Jim Canyon
Yankee Jim Canyon is the Yellowstone's best white water, with several major rapids. Steep canyon walls make it a difficult stretch to fish. Because of the potential danger floating the Canyon many commercial fishing guides do not float this stretch, though recreational floaters are common.
From the Tom Miner Bridge (or the Carbella access just downstream) down to Point of Rocks, there is some excellent water, lots of fast pocket water with several nice pools. Once the river reaches the Point of Rocks, the gradient decreases substantially and the river turns into slower, longer pools.
Emigrant to Mallard's Rest
Drift Boat Fly Fishing on the Yellowstone near Grey Owl
Just downstream from Emigrant is Grey Owl, one of the best fishing access points on the river. From here down to Mallard's Rest there is a pleasant mix of big pools and large browns and rainbows.
Mallard's Rest to Carter's Bridge
Armstrong Spring Creek near Mallard's Rest
This section of river known as Paradise Valley provides some of the most spectacular scenery on the Yellowstone, along with some of the best fishing. The scenery is dominated by the Absaroka Mountains to the east and the Gallatin Mountains to the west. Along this stretch numerous spring creeks flow into the river, many of which are blue ribbon trout streams in their own right, such as DePuy Spring Creek. Rainbows dominate this part of the river, but browns can be found here also.
Carter's Bridge to Highway 89 Bridge
Winter Ice Near Carter's Bridge, January 2008
Because the Yellowstone flows right through Livingston between these points, this is known as the "town stretch". Given the presence of the upstream spring creeks for spawning, this reach of fast water is ideal habitat for rainbows which make up most of the population here. The use of a drift boat is the best way to access this stretch, though there are some good access points for walking and wading as well.
Highway 89 Bridge to Big Timber
This section starts about five miles to the east of Livingston, just off Interstate 90, where Highway 89 turns north, toward White Sulphur Springs. This lower river, from here on down through Big Timber is similar to the water around Livingston, but the riffles and pools are farther apart so there is more unproductive water. The fish populations are not as high as in the upper river and water through town, but there are some very large rainbows and browns to be caught in this stretch. In late summer, wind gusting across hayfields blows a lot of grasshoppers in the river which creates explosive reactions from big fish.
Yellowstone River Conservation District Council - The council’s purpose is to provide local leadership, assistance, and guidance for the wise use and conservation of the Yellowstone River’s natural resources.
Western Watersheds Project — The mission of Western Watersheds Project is to protect and restore western watersheds and wildlife through education, public policy initiatives and litigation.
Montana River Action — The clean flowing waters of Montana belong to the people and are held in trust by the State for a pollution-free healthful environment guaranteed by our Montana Constitution. Montana River Action's mission is to protect and restore rivers, streams and other water bodies.