The capsule landed just before 6:30am (2230 GMT Wednesday) on Thursday in the vast grasslands of Inner Mongolia around the Siziwang area 300 km northwest of the capital Beijing.
The official Xinhua news agency quoted recovery officials as saying Yang was in good health and the Beijing Space Command and Control Centre announced the mission had been a success.
Lieutenant Colonel Yang, 38, has exited the capsule and was seen waving to the recovery team, following his 21-hour flight that covered 600,000 km, Xinhua said.
Premier Wen Jiabao was seen on television talking to Yang on the phone and smiling widely and clapping after he hung up.
China's Aerospace Command and Control Centre gave the order at 5:35am (2135 GMT) for Yang to begin his descent to Earth.
The craft made a gentle turnaround upon receiving the order and the re-entry capsule separated from the orbital module and the propulsion module.
The touchdown marked the end of a historic flight which blasted off from Jiuquan in northeast China at 9am (0100 GMT) on Wednesday.