The ideal Yorkshire Terrier character or "personality" is described with a "carriage very upright" and "conveying an important air." Though small, the Yorkshire Terrier is active, very overprotective, curious, and fond of attention. Mentally sound and emotionally secure ones should normally not show the soft submissive temperament seen in lap dogs although many exhibit this behaviour due to improper training. Because of this, it is advised that a Yorkie would not be suitable for a home with typical young children. Instead, they make ideal companions for older families with many more reputable breeders routinely only homing to families with children older than about 8 years for the comfort of the dog, but more so for the benefit of the child.

Yorkshire Terriers are an easy dog breed to train. This results from their own nature to work without human assistance. They are naturally smart and quick to learn with many being food and or praise motivated. Because they were developed as a working breed many need a lot of both physical and mental stimulation—with both long walks/runs but also indoor games and training to keep their mind busy. They are known for being yappy, but many have reported that a contented Yorkie is a quiet one—that will happily curl up on your knee in the evening. Of course, it must be noted that they are all individuals, with some being much more laid back than others and the breeder should ideally be able to advise on the needs and temperaments of their particular line. Yorkies are easily adaptable to all surroundings, travel well and make suitable pets for many homes. Due to their small size, they require limited exercise but need daily interaction with people. They thrive on attention and love. Many however are timider around other dogs and prefer to stay close to their humans for comfort.

Health issues often seen in the Yorkshire Terrier include bronchitis, lymphangiectasia, portosystemic shunt, cataracts, and keratitis sicca. Additionally, Yorkies often have a delicate digestive system, with vomiting or diarrhea resulting from consumption of foods outside of a regular diet. The relatively small size of the Yorkshire Terrier means that it usually has a poor tolerance for anesthesia. Additionally, a toy dog such as the Yorkie is more likely to be injured by falls, other dogs and owner clumsiness. Injection reactions (inflammation or hair loss at the site of an injection) can occur. In addition allergies can cause skin to be dry, itchy and/or red.

The life span of a Yorkie is 13–20 years. Undersized Yorkies (3 pounds or less) generally have a shorter life span, as they are especially prone to health problems such as chronic diarrhea and vomiting; are even more sensitive to anesthesia; and are more easily injured.

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