Yahoo said it would launch a "clean, modern and immersive design" search engine for Firefox users starting in December.
The news comes as Google's arrangement with Firefox maker Mozilla nears an end after a decade-long partnership.
Market leader Google accounts for 67% of searches from US desktop computers.
That compares to about 20% for Microsoft and 10% for Yahoo, according to research firm comScore.
Yahoo chief executive Marisa Mayer called the five-year deal with Firefox "the most significant partnership for Yahoo in five years".
"At Yahoo, we believe deeply in search - it's an area of investment and opportunity for us," she added.
Firefox users in the US will be automatically directed to search results on Yahoo's website when they enter a subject into the small box that appears at the top of the browser.
Firefox, however, does lag behind Google Chrome in the US browser market.
It accounts for about 10% of browsers on desktop computers, mobiles and tablets compared to over 33% for Google Chrome in October, according to tech data firm StatCounter.
Along with ending its partnership with Google in the US, Mozilla is also directing Firefox to Baidu's search engine in China and Yandex in Russia.
"Our new search strategy doubles down on our commitment to make Firefox a browser for everyone, with more choice and opportunity for innovation," said Mozilla chief executive Chris Beard.
Meanwhile, just last month, Google chairman Eric Schmidt had said that the firm's biggest rival in online search was e-commerce giant Amazon and not competitors like Yahoo.
Globally, Google accounts for about 90% of the online search market.
Tech giant Yahoo will now replace online leader Google as the default search engine on Firefox's internet browsers in the US.