Yau Tong means "oil pond" in Cantonese — though it was once known by the homophone 游塘, which simply meant "pond." The oil pond name seems to have stuck after an oil depot was built in nearby Cha Kwo Ling in the 1950s, though the connection is not fully documented. Before 1940 the area was largely undeveloped, considered rural or suburban on the edge of industrial Kwun Tong District — Hong Kong's most densely populated district. The 1960s brought transformation at scale: the Hong Kong government zoned Yau Tong for public housing along Lei Yue Mun Road, and in 1964 a number of housing estates were built. What had been shoreline and scrubland became residential towers with industrial zones pushed toward the coast. The sea-facing south became a practical choice for activities the city needed but preferred to locate away from its more prestigious addresses: ship repair, warehousing, manufacturing.

The Lei Yue Mun channel — named for the carp and door that local geography supposedly resembles — is one of the narrower passages into Victoria Harbour's eastern approaches. It separates Yau Tong from the hills of Hong Kong Island, and the view across it has always been one of the district's most dramatic features. Lei Yue Mun Plaza, the shopping centre that opened in 2001 on Lei Yue Mun Road, took its name from the channel and built its identity around the area's fishing history: its logo features three fish, a deliberate reference to the trade that once defined the adjacent village. The mall's three floors and 5,600 square metres of floor space connect by bridge to Domain, the Housing Authority's larger shopping complex that opened in 2012, serving around 80,000 residents. Between them, they anchor a pedestrian network of bridge connections to surrounding housing estates — a distinctive Hong Kong solution to the problem of moving people between destinations without asking them to cross traffic.

At the eastern edge of Yau Tong, the terrain rises sharply toward Devil's Peak — a prominence with a history more interesting than its English name suggests. The peak was fortified by the British in the early twentieth century, and the ruins of that fortification remain accessible on foot via the Wilson Trail. Section 3 of the Wilson Trail begins in Yau Tong, climbing out of the housing estates and up into terrain that feels dramatically different from the district below: rocky paths, exposed ridgelines, views across the Tseung Kwan O corridor and down to the Lei Yue Mun channel. The trail system connects 78 kilometres of terrain across Hong Kong, but the stretch above Yau Tong offers a particularly stark version of the city's defining contrast — tower blocks and hill country separated by a ten-minute walk. The Eastern Harbour Crossing, the underwater road tunnel that opened in 1989 linking Kwun Tong to Quarry Bay on Hong Kong Island, runs beneath the harbour just west of Devil's Peak.

The Town Planning Board has spent years working to phase out the industrial operations that once dominated Yau Tong Bay's southern waterfront. Several factory buildings have been demolished as the government's plans for private residential development move slowly forward. The process reflects a pattern common across Hong Kong: industrial land, especially sea-facing land, gradually converted to residential and commercial use as manufacturing moves elsewhere and harbour views acquire premium value. Yau Tong station, which opened on 4 August 2002 as part of the Tseung Kwan O line extension, sits at the intersection of the Kwun Tong and Tseung Kwan O MTR lines — an interchange point that connects the district to both Kowloon and Hong Kong Island without requiring passengers to pass through Central. That transport link, more than any physical feature, changed what Yau Tong could be. Before 2002, it was an endpoint. Afterward, it became a pass-through, and that changed everything about how the district understood its own position.