During Li Cunxu's reign

In 923, Li Cunxu declared himself the emperor of a new Later Tang. He soon thereafter launched a surprise attack on the Later Liang capital Daliang, catching it defenseless; Zhu Zhen, believing that he could not save himself, committed suicide as the city fell, ending Later Liang. Li Cunxu shortly after established the capital of his new dynasty at Luoyang.^[12] Then-military governor of Xuanhua sent Li Yu, with a petition submitting to Later Tang rule, to Luoyang. The Later Tang officials, who had previously heard about Li Yu from Zhang Li, welcomed him. Shortly after, he was made Zhuke Langzhong (主客郎中), a supervisory official at the ministry of rites (禮部, Libu). Several months later, he was made an imperial scholar (翰林學士, Hanlin Xueshi).^[4]

In 925, Li Cunxu launched a major attack on Later Tang's southwestern neighbor Former Shu, putting his son Li Jiji the Prince of Wei in titular command of the operations but with his chief of staff Guo Chongtao in actual command.^[13] Li Yu volunteered for duty on this campaign,^[4] and he and Ren Huan were made chief strategists on Guo's staff. On the campaign, Later Tang's army ran into initial difficulties with terrain, but Li Yu advocated quick advancement, as he believed that Former Shu's emperor Wang Zongyan had lost the faith of his subjects due to his frivolous rule, and a quick advancement will cause Former Shu's morale to collapse. Guo agreed with him and ordered quick advancement.^[13] On the campaign, Li Yu was also in charge of military correspondences. After the Later Tang army conquered Former Shu later in 925, Li Yu, for his contributions, was given the additional office of Zhongshu Sheren (中書舍人), a mid-level official at the legislative bureau (中書省, Zhongshu Sheng).^[4]

During Li Siyuan's reign

However, after the victory, Li Cunxu and his wife Empress Liu came to suspect Guo Chongtao of planning rebellion, and they ordered the deaths of Guo and Guo's ally, the major general Zhu Youqian—which in turn precipitated mutinies across the empire,^[14] eventually resulting in Li Cunxu's death in a mutiny at Luoyang itself in 926. Li Jiji tried to take his army and return to Luoyang to take over imperial government, but with his own soldiers deserting him, committed suicide. Li Cunxu's adoptive brother Li Siyuan, who had previously rebelled against Li Cunxu himself, arrived at Luoyang and declared himself emperor.^[15]

Ren Huan became a chancellor in Li Siyuan's new administration.^[15] As he admired Li Yu, he repeatedly recommended Li Yu as a chancellor as well to Li Siyuan's powerful chief of staff An Chonghui. However, An's ally Kong Xun was then trying to plant his allies in the administration, and at Kong's recommendation, Cui Xie was made a chancellor instead of Li Yu. Shortly after, Li Yu was put in charge of the imperial examinations, and at a later point made both the deputy minister of defense (兵部侍郎, Bingbu Shilang) and chief imperial scholar (翰林學士承旨, Hanlin Xueshi Chengzhi).^[4] Early in Li Siyuan's Changxing era (930-933), Li Yu was removed from those posts and given the largely ceremonial post of minister of worship (太常卿, Taichang Qing). However, shortly after, then-chancellor Zhao Feng was removed from his chancellor post, and Li Yu was made Zhongshu Shilang (中書侍郎, deputy head of the examination bureau) and given the designation Tong Zhongshu Menxia Pingzhangshi (同中書門下平章事), making him a chancellor, replacing Zhao.^[4][16] He was also later given the additional title of grand scholar at Jixian Hall (集賢殿).^[4]

It was said that late in Li Siyuan's reign, his son Li Congrong the Prince of Qin dominated the court scene and was often violent to officials, causing them to be unwilling to make policy proposals. Li Yu was one of the few who did dare to speak up, but was not finding many who were willing to publicly support him. Later, while remaining chancellor, he was made Menxia Shilang (門下侍郎, the deputy head of the examination bureau) as well as minister of civil service affairs (吏部尚書, Libu Shangshu); he was also put in charge of editing the imperial histories. During this time, he gathered a group of scholars and created a 30-volume collection of the biographies of those who contributed to Later Tang's founding. As chancellor, he was said to be not spending effort on managing his own property, and he did not have a mansion; rather, he stayed at a government pavilion as a guest resident. Once, when he was ill, Li Siyuan sent messengers to attend to him, and the messengers informed Li Siyuan of the poor living conditions that Li Yu was in. Li Siyuan responded by awarding him with high quality blankets and bed screens.^[4]

During Li Conghou's and Li Congke's reigns

Li Siyuan died in 933 and was succeeded by his son Li Conghou the Prince of Song. (Li Congrong had earlier tried to forcibly seize power when Li Siyuan was seriously ill, believing that he needed to preemptively act against the high-level officials to avoid being bypassed for succession, but was defeated and killed.) Li Yu remained chancellor. Meanwhile, Li Conghou was said to be kind but irresolute. Li Yu commented to his colleagues, "Our Lord rarely visits us for advice. Even though we are in honorable positions, we should be concerned." The other chancellors did not dare to respond to him.^[17]

In 934, then-chiefs of staff to Li Conghou, Zhu Hongzhao and Feng Yun, came to suspect Li Conghou's brother-in-law Shi Jingtang the military governor of Hedong Circuit (河東, headquartered in modern Taiyuan, Shanxi) and did not want Shi to remain long at Hedong and also wanted to recall their ally, the powerful eunuch Meng Hanqiong, who was then serving as the acting military governor of Tianxiong Circuit (天雄, headquartered in modern Handan, Hebei), to the imperial government. They thus issued a series of orders transferring Fan Yanguang the military governor of Chengde Circuit (成德, headquartered in modern Shijiazhuang, Hebei) to Tianxiong, Shi from Hedong to Chengde, and Li Conghou's adoptive brother Li Congke the military governor of Fengxiang Circuit (鳳翔, headquartered in modern Baoji, Shaanxi) to Hedong. However, Li Congke thought that these transfers were targeting him, and therefore rebelled. He prevailed over the imperial forces sent against him and headed toward Luoyang. Li Conghou fled Luoyang. Li Yu and his chancellor colleagues Feng Dao and Liu Xu were set to greet the arriving Li Congke. Feng asked their subordinate Lu Dao (盧導), then serving as Zhongshu Sheren, to draft a petition to Li Congke asking him to take the throne. Lu pointed out that it was disloyal to, upon Li Conghou's flight, immediately ask someone else to take the throne. When Feng insisted, Li Yu sided with Lu, stating, "The Sheren's words were quite correct. Our faults are greater than the number of hairs on our heads." Feng thus did not press the point at that time (although eventually all of the officials, presumably including Li Yu, did petition Li Congke to take the throne, and Li Congke, after initially rebuking them, did so after Li Siyuan's wife Empress Dowager Cao issued an edict deposing Li Conghou and making Li Congke emperor). Li Conghou was eventually forced to commit suicide.^[18]

Shortly after Li Congke took the throne, Feng was removed from his chancellor post, leaving Li Yu and Liu as chancellors. However, they quickly were embroiled in conflicts with each other, as, as chancellors, they were both said to be insistent on their opinions and unwilling to compromise, particularly because Li Yu often made fun of Feng's actions and then used to make fun of Liu (as one of Feng's children married one of Liu's children, and they were closely aligned). Li Congke was much apprehensive of his chancellors' conflicts with each other, as they were causing the imperial administration to grind to a halt. He thus named Lu Wenji and Yao Yi as chancellors, and then removed both Li Yu and Liu from their chancellor posts, leaving both of them as Pushe (僕射, heads of the executive bureau (尚書省, Shangshu Sheng))—highly honored positions lacking substantial powers by this point.^[18] The fall of the following year (935), Li Yu became seriously ill and requested retirement, but Li Congke declined his offer to retire. He died shortly after, while still serving as Pushe.^[1][4]