Yelü Abaoji, whose Han name is Yi, is from the Khitan Diela tribe. He was born into a noble family and served as the leader of the tribe. He was tall and good at riding and shooting. In 901, he was appointed by Khan Dejin Khan of Yaonan clan as Yili Jin of Diela tribe. He was responsible for conquests. He raided Shiwei, Xi, Jurchen tribes, Hedong and Daibei tribes in successive years, capturing a large number of people and livestock. In 905, he became brothers with Li Keyong, the governor of Hedong Jiedu in Yunzhou. In 907, he replaced Hende Jin as Khitan Khan.
Abaoji was the Khan for a long time and refused to give up his throne. His younger brother Ci Ge and others rebelled three times, and it took him three years to put them down. In 916, he imitated the Central Plains system and proclaimed himself emperor, established the Yuan Shenxian, and established his eldest son Yelü Bei as the Crown Prince. After that, he built the imperial capital, created the Khitan script, formulated laws, appointed Han Yanhui, Han Zhigu and other Han advisers, established prefectures and counties to resettle Han people, and started the Liao dynasty pattern of "governing according to customs".
In 924, he personally led an army to the west, reaching as far as the Uyghurs' ancient city in Mobei; in 926, he also marched east to the Bohai Sea, conquered its capital Huhan City, and renamed the Bohai Sea as the Dongdan Kingdom, with Yelü Bei guarding it as the Human Emperor. In July of the same year, Abaoji died of illness in Buyeo Prefecture on his way to the army. He was fifty-five years old. Empress Shu Lüping immediately proclaimed herself emperor, and the following year she established her second son Yelü Deguang as emperor. This paved the way for the struggle for the throne between the eldest son and the second son.
Abaoji started as a tribal leader, unified the Khitan tribes, and transformed the position of the elected khan into a hereditary throne. He also absorbed the Central Plains system to build cities, create writing, and establish prefectures and counties, turning the nomadic tribes into a multi-ethnic country. He destroyed the Bohai Sea in the east and conquered Mobei in the west, establishing the territorial scale of Liao Dynasty. However, he failed to establish a stable inheritance system during his lifetime. The eldest son and the second son fought for decades, which became the source of political turmoil in the early Liao Dynasty.