The agreement with the attorneys general of New York and Nebraska is the first to institute systemwide controls over chat rooms likely to be frequented by child predators.
Yahoo said it voluntarily suspended all user-created chat rooms on June 15 and is evaluating whether to reinstate the ability of users to create them.
Earlier that month, Yahoo removed or barred the posting of 70,000 rooms whose names suggested illegal conduct, including the promotion of sex between adults and children. The number represents 11.4 percent of the 614,000 names Yahoo reviewed.
Some rooms carried labels such as "kiddies who love sex," "girls 13 & up for much older men," "8-12 yo girls for older men" and "teen girls for older fat men." Many were located in chat categories titled "Schools and Education" and "Teen."
In an Oct. 7 letter of agreement with New York Attorney General Eliot Spitzer, Yahoo General Counsel Michael Callahan acknowledged that "certain individuals, interested in engaging in sexual conduct with minors, have at times entered or even created chat rooms for such purposes. Yahoo is committed to continue to work with (the) law enforcement community, to minimize, target and take action against such behavior."
The agreement is "an affirmative step for Yahoo," Spitzer said at a news conference. The attorney general said his office will look at other Internet service providers that may have similar problems.
"Because of this agreement, Yahoo chat rooms are a safer place today," Jon Bruning, Nebraska's attorney general, said in a statement.
Yahoo agreed to prescreen user-created chat room names, to reject names encouraging sexual activity between adults and children and, on finding chat rooms encouraging such activity, to purge them within 24 hours. It also agreed to develop education materials promoting the safe use of chat rooms.
In a statement, spokeswoman Mary Osako said Yahoo will also enhance online users' safety by restricting Yahoo Chat to users 18 and older and removing the Teen category.
New York and Nebraska began their investigations this year after learning that children had unfettered access to adult chat rooms.
One investigator, posing as a 14-year-old girl, reported receiving 35 personal messages of a sexual nature over 25 minutes, Spitzer said. The senders of those messages appeared to be adult chat room participants, he said.
Yahoo also agreed to donate $175,000 to the National Center for Missing and Exploited Children's New York affiliates and additional free online advertising to promote Internet safety.