The 1.1 billion US dollars (£720 million) deal makes New Yorker David Karp - who attended high school for only a year - the latest internet whiz-kid to scoop an astronomical windfall from a web start-up.
The move will give Yahoo its own social media platform as it seeks to attract younger and trendier internet users in a bid to match rivals Google and Facebook.
Yahoo, led by chief executive Marissa Mayer, said: "Per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business. David Karp will remain CEO."
Best known for its clean, simplistic design, Tumblr claims to host more than 108 million blogs, with over 50 billion posts. Its roster of celebrity users features pop singer Beyonce and media mogul Rupert Murdoch.
In his blog on Tumblr, Mr Karp announced: "I'm elated to tell you that Tumblr will be joining Yahoo." The message went on to promise users of the site that it would not "compromise" on its vision of making the site the "ultimate creative canvas" before signing off "F*** yeah, David".
Yahoo has 700 million customers worldwide and employs 11,500 people in 26 countries, including the UK where it has an office in London. Its services include a search engine and an email client called Yahoo! Mail. But it has been under pressure to innovate to better compete with its internet rivals.
Executives believe the deal will grow Yahoo's audience by 50% to more than a billion monthly users, and grow traffic by around 20%. It will also result in "seamless" advertising opportunities, the company said.
Ms Mayer said: "On many levels, Tumblr and Yahoo couldn't be more different, but, at the same time, they couldn't be more complementary." Mr Karp said: "We're elated to have the support of Yahoo and their team who share our dream to make the internet the ultimate creative canvas."