Maktoob was founded in 2000 and claims more than 16.5 million users in countries such as the United Arab Emirates, Kuwait, Egypt and Saudi Arabia.
The portal "reaches one in three people online throughout the Arab world," the companies said.
Through the deal, Yahoo will offer Arabic-language content for the first time and versions of its products and services, including instant messaging and email, in Arabic.
Carol Bartz, the company's chief executive officer, said:"This acquisition will accelerate Yahoo's strategy of expanding in high-growth emerging markets where we believe Yahoo has unparalleled opportunity to become the destination of choice for consumers."
Samih Toukan, a Maktoob founder, called the two companies "natural partners".
The partnership, he said, "should help energise the internet market in the region as a whole".
"We are excited about Yahoo building a stronger presence in the Middle East and bringing its compelling suite of services to Arab users in Arabic."
After the acquisition is complete, Maktoob.com will become a wholly-owned subsidiary of Yahoo.
The agreement does not include other Maktoob Group products, such as Souq.com, online payment website cashU.com and Arabic search engine Araby.com, which will operate under a new entity, the Jabbar Internet Group.