Yuan is a Firebender from Republic City and the third member to join Team Avatar. He is valued for his sense of humor and practical advice, often serving as the peace-maker of the group. Yuan lives in one of the poorest boroughs of Republic City, and in order to help his mother make ends meet and provide for his four siblings, he works at Tabe-Mashu, a restaurant specializing in supposed Fire Nation cuisine. While a skilled firebender, he prefers to practice his martial art as a personal form of training as opposed to a method of combat. Nonetheless, he has proven himself to be a skilled fighter and Pro-bender, despite his lack of experience. In order to pay his father's old debts, Yuan became unwillingly involved with the Agni Kai Triad and took part in several hits, which is how he eventually came into contact with Mako, the retiring Chief of Police.
Yuan was born in 203 AG to Kyang, a nonbender, and Yunja, a firebender. Both of his parents were Republic City natives. His father worked as an auto machinist at a Future Industries factory, where he apparently met Yunja, who was working as a security guard at the time. Yuan's family was much better off during his early childhood, but the ten year drought that sunk the Earth Kingdom's economy took a toll on the United Republic as well, and times were hard. Yunja was resourceful and did her best to stretch the budget, but by the time Yuan's third sibling was born, they were forced to move to the Dragon Flats borough where they could afford the rent. Kyang lost his job when Yuan was twelve, and Yuan watched as his father fell into depression and alcoholism. His arguments with Yunja became more frequent and increasingly violent. One day, Yuan jumped between his parents during one of their fights. The bottle that Kyang had swung at bottle at his wife shattered against the side of Yuan's face, and the glass that cut his left eyebrow gave him his signature scar. Horrified at what he had done, Kyang decided it would be best if he left the family to "give everyone some space" for a time. But he wasn't there to see the birth of Yuan's youngest brother a few months later like he had promised. For Yunja, his absence spoke louder than words, and she quietly decided to make their separation permanent.
Yuan had taken on part of the responsibility of caring for his younger siblings even before Kyang had left, and after Anji was born Yunja started to rely on Yuan more heavily. He had already experienced what it was like to make personal sacrifices before when his parents had told him that they could no longer afford the firebending school he had attended as a child, and had kept a stiff upper lip even thought it had been difficult to give up something that he had loved. He found he was forced to make the same decision again, but this time it was much harder to set aside his dreams of becoming an engineer.
Yuan had always been fascinated by machinery, which was partly a result of his father’s influence. He was a bright student and knew he could pass the strict entrance exams into Republic University easily. However, with his mother working full-time, Yuan also knew it would be selfish for him to continue his education when he could be working to put food on the table. He finished his mandatory education by purposefully failing his exams and told his mother that he would like to work alongside her at the electricity plant, as he had taught himself how to bend lightning. Yunja was crushed to learn that Yuan would not be able to continue his education, knowing how much it had meant to him, but would not allow Yuan to work at the factory under any circumstances. They finally reached a compromise, and Yuan found a job at Tabe-Mashu. It was one of the few places aside from the factory that would hire a kid his age, where he has worked ever since.