Term "Luxury yacht" began to appear at the beginning of the 20th century when wealthy individuals constructed large private yachts for personal pleasure. This coincided with it being picked up by the press as well, and its appearance in magazines such as Boat International, stabilized it as an everyday term in the industry. Early luxury motor yachts include the Cox and King yachts, M/Y (motor yachts) Christina O and M/Y Savarona.

The number of very large yachts has increased rapidly since the 1990s and increasingly only yachts above around 65 meters (213 feet) stand out among other luxury yachts. A yacht of this size usually has four decks above the water line and one or two below. It is likely to have a helicopter landing platform. Apart from additional guest cabins, which almost always include one or more "VIP suites" besides the owner's suite, extra facilities compared to a 50-metre (160 feet) yacht will include some or all of indoor Jacuzzis, sauna and steam rooms, a beauty salon, massage and other treatment rooms, a medical center, a discothèque, a cinema, plunge pool, a playroom, and additional living areas such as a separate bar, secondary dining room, private sitting rooms or a library.

From 2009 yachts above 100 meters (328 feet) are still rare but they are appearing more common. Usually they have five decks above the water line and one below. The very largest yachts have begun to incorporate such features as helicopter hangars, indoor swimming pools and miniature submarines. Number of "small" super yachts has led to the introduction of the new terms like "Mega Yacht" and "Giga Yacht" to separate the elite among luxury yachts. The latest launch M/Y Eclipse out of the Yard of Blohm and Voss is the largest Super yacht in the World built for the Russian Roman Abramovich.