diff --git a/src/main/java/org/prebid/server/bidder/yahooads/YahooAdsBidder.java b/src/main/java/org/prebid/server/bidder/yahooads/YahooAdsBidder.java
index 800f21f2c9c..e6ebc55a1d1 100644
--- a/src/main/java/org/prebid/server/bidder/yahooads/YahooAdsBidder.java
+++ b/src/main/java/org/prebid/server/bidder/yahooads/YahooAdsBidder.java
@@ -17,6 +17,7 @@
 import io.vertx.core.MultiMap;
 import io.vertx.core.http.HttpMethod;
 import org.apache.commons.collections4.CollectionUtils;
+import org.apache.commons.lang3.ObjectUtils;
 import org.apache.commons.lang3.StringUtils;
 import org.prebid.server.bidder.Bidder;
 import org.prebid.server.bidder.model.BidderBid;
@@ -38,6 +39,7 @@
 import java.util.Collections;
 import java.util.List;
 import java.util.Objects;
+import java.util.regex.Pattern;
 
 public class YahooAdsBidder implements Bidder<BidRequest> {
 
@@ -49,6 +51,9 @@ public class YahooAdsBidder implements Bidder<BidRequest> {
     private static final String GPP_PROPERTY = "gpp";
     private static final String GPP_SID_PROPERTY = "gpp_sid";
 
+    // VAST_MARKUP is a heuristic to find video bids without mtype on banner+video imps.
+    private static final Pattern VAST_MARKUP = Pattern.compile("<VAST[ \\t\\r\\n/>]");
+
     private final String endpointUrl;
     private final JacksonMapper mapper;
 
@@ -248,50 +253,78 @@ private static MultiMap makeHeaders(Device device) {
     public Result<List<BidderBid>> makeBids(BidderCall<BidRequest> httpCall, BidRequest bidRequest) {
         try {
             final BidResponse bidResponse = mapper.decodeValue(httpCall.getResponse().getBody(), BidResponse.class);
-            return Result.of(extractBids(bidResponse, httpCall.getRequest().getPayload()), Collections.emptyList());
+            final List<BidderError> errors = new ArrayList<>();
+            final List<BidderBid> bids = extractBids(bidResponse, httpCall.getRequest().getPayload(), errors);
+            return Result.of(bids, errors);
         } catch (DecodeException | PreBidException e) {
             return Result.withError(BidderError.badServerResponse(e.getMessage()));
         }
     }
 
-    private static List<BidderBid> extractBids(BidResponse bidResponse, BidRequest bidRequest) {
+    private static List<BidderBid> extractBids(BidResponse bidResponse,
+                                               BidRequest bidRequest,
+                                               List<BidderError> errors) {
         final List<SeatBid> seatBids = bidResponse != null ? bidResponse.getSeatbid() : null;
         if (seatBids == null) {
             return Collections.emptyList();
         }
-        return bidsFromResponse(bidResponse, bidRequest.getImp());
+        return bidsFromResponse(bidResponse, bidRequest.getImp(), errors);
     }
 
-    private static List<BidderBid> bidsFromResponse(BidResponse bidResponse, List<Imp> imps) {
+    private static List<BidderBid> bidsFromResponse(BidResponse bidResponse,
+                                                    List<Imp> imps,
+                                                    List<BidderError> errors) {
         return bidResponse.getSeatbid().stream()
                 .filter(Objects::nonNull)
                 .map(SeatBid::getBid)
                 .filter(Objects::nonNull)
                 .flatMap(Collection::stream)
                 .filter(Objects::nonNull)
-                .map(bid -> makeBidderBid(bid, imps, bidResponse.getCur()))
+                .map(bid -> makeBidderBid(bid, imps, bidResponse.getCur(), errors))
                 .filter(Objects::nonNull)
                 .toList();
     }
 
-    private static BidderBid makeBidderBid(Bid bid, List<Imp> imps, String currency) {
-        final BidType bidType = getBidType(bid, imps);
-        return bidType != null
-                ? BidderBid.of(bid, bidType, currency)
-                : null;
+    private static BidderBid makeBidderBid(Bid bid, List<Imp> imps, String currency, List<BidderError> errors) {
+        final Imp imp = findImp(bid, imps);
+        try {
+            final BidType bidType = resolveBidType(bid, imp);
+            return bidType != null
+                    ? BidderBid.of(bid, bidType, currency)
+                    : null;
+        } catch (PreBidException e) {
+            errors.add(BidderError.badServerResponse(e.getMessage()));
+            return null;
+        }
     }
 
-    private static BidType getBidType(Bid bid, List<Imp> imps) {
+    private static Imp findImp(Bid bid, List<Imp> imps) {
         for (Imp imp : imps) {
             if (imp.getId().equals(bid.getImpid())) {
-                if (imp.getBanner() != null) {
-                    return BidType.banner;
-                } else if (imp.getVideo() != null) {
-                    return BidType.video;
-                }
-                return null;
+                return imp;
             }
         }
         throw new PreBidException("Unknown ad unit code '%s'".formatted(bid.getImpid()));
     }
+
+    private static BidType resolveBidType(Bid bid, Imp imp) {
+        return switch (ObjectUtils.getIfNull(bid.getMtype(), 0)) {
+            case 0 -> resolveBidTypeFromImp(bid, imp);
+            case 1 -> BidType.banner;
+            case 2 -> BidType.video;
+            default -> throw new PreBidException(
+                    "Unsupported mtype %d for bid '%s'".formatted(bid.getMtype(), bid.getId()));
+        };
+    }
+
+    private static BidType resolveBidTypeFromImp(Bid bid, Imp imp) {
+        if (imp.getVideo() != null && (imp.getBanner() == null || isVast(bid.getAdm()))) {
+            return BidType.video;
+        }
+        return imp.getBanner() != null ? BidType.banner : null;
+    }
+
+    private static boolean isVast(String adm) {
+        return StringUtils.isNotEmpty(adm) && VAST_MARKUP.matcher(adm).find();
+    }
 }
diff --git a/src/test/java/org/prebid/server/bidder/yahooads/YahooAdsBidderTest.java b/src/test/java/org/prebid/server/bidder/yahooads/YahooAdsBidderTest.java
index 5abbb2dc509..0da85da532d 100644
--- a/src/test/java/org/prebid/server/bidder/yahooads/YahooAdsBidderTest.java
+++ b/src/test/java/org/prebid/server/bidder/yahooads/YahooAdsBidderTest.java
@@ -390,6 +390,213 @@ public void makeBidsShouldSkipNotSupportedImpAndReturnVideoBidWhenVideoPresent()
                 .containsOnly(BidderBid.of(Bid.builder().impid("321").build(), video, "USD"));
     }
 
+    @Test
+    public void makeBidsShouldReturnVideoBidWhenMtypeIsVideoOnMultiFormatImp() throws JsonProcessingException {
+        // given
+        final Bid bid = Bid.builder().impid("321").mtype(2).adm("<VAST version=\"4.0\"></VAST>").build();
+        final BidderCall<BidRequest> httpCall = givenHttpCall(givenMultiFormatImp(), bid);
+
+        // when
+        final Result<List<BidderBid>> result = target.makeBids(httpCall, null);
+
+        // then
+        assertThat(result.getErrors()).isEmpty();
+        assertThat(result.getValue()).containsOnly(BidderBid.of(bid, video, "USD"));
+    }
+
+    @Test
+    public void makeBidsShouldReturnBannerBidWhenMtypeIsBannerOnMultiFormatImp() throws JsonProcessingException {
+        // given
+        final Bid bid = Bid.builder().impid("321").mtype(1).adm("<div>ad</div>").build();
+        final BidderCall<BidRequest> httpCall = givenHttpCall(givenMultiFormatImp(), bid);
+
+        // when
+        final Result<List<BidderBid>> result = target.makeBids(httpCall, null);
+
+        // then
+        assertThat(result.getErrors()).isEmpty();
+        assertThat(result.getValue()).containsOnly(BidderBid.of(bid, banner, "USD"));
+    }
+
+    @Test
+    public void makeBidsShouldTreatZeroMtypeAsAbsent() throws JsonProcessingException {
+        // given
+        final Bid bid = Bid.builder().impid("321").mtype(0).adm("<VAST version=\"4.0\"></VAST>").build();
+        final BidderCall<BidRequest> httpCall = givenHttpCall(givenMultiFormatImp(), bid);
+
+        // when
+        final Result<List<BidderBid>> result = target.makeBids(httpCall, null);
+
+        // then
+        assertThat(result.getErrors()).isEmpty();
+        assertThat(result.getValue()).containsOnly(BidderBid.of(bid, video, "USD"));
+    }
+
+    @Test
+    public void makeBidsShouldReturnErrorForUnsupportedMtypeAndKeepOtherBids() throws JsonProcessingException {
+        // given
+        final Bid audioBid = Bid.builder().id("audioBidId").impid("321").mtype(3).build();
+        final Bid nativeBid = Bid.builder().id("nativeBidId").impid("321").mtype(4).build();
+        final Bid videoBid = Bid.builder().id("videoBidId").impid("321").mtype(2).build();
+        final BidderCall<BidRequest> httpCall = givenHttpCall(givenMultiFormatImp(), audioBid, nativeBid, videoBid);
+
+        // when
+        final Result<List<BidderBid>> result = target.makeBids(httpCall, null);
+
+        // then
+        assertThat(result.getErrors()).containsExactly(
+                BidderError.badServerResponse("Unsupported mtype 3 for bid 'audioBidId'"),
+                BidderError.badServerResponse("Unsupported mtype 4 for bid 'nativeBidId'"));
+        assertThat(result.getValue()).containsExactly(BidderBid.of(videoBid, video, "USD"));
+    }
+
+    @Test
+    public void makeBidsShouldReturnErrorForUnsupportedMtypeOnBannerOnlyImp() throws JsonProcessingException {
+        // given
+        final Bid bannerBid = Bid.builder().id("bannerBidId").impid("321").mtype(1).adm("<div>ad</div>").build();
+        final Bid nativeBid = Bid.builder().id("nativeBidId").impid("321").mtype(4).build();
+        final Imp bannerOnlyImp = Imp.builder().id("321").banner(Banner.builder().build()).build();
+        final BidderCall<BidRequest> httpCall = givenHttpCall(bannerOnlyImp, bannerBid, nativeBid);
+
+        // when
+        final Result<List<BidderBid>> result = target.makeBids(httpCall, null);
+
+        // then
+        assertThat(result.getErrors())
+                .containsExactly(BidderError.badServerResponse("Unsupported mtype 4 for bid 'nativeBidId'"));
+        assertThat(result.getValue()).containsExactly(BidderBid.of(bannerBid, banner, "USD"));
+    }
+
+    @Test
+    public void makeBidsShouldReturnVideoBidWhenNoMtypeAndAdmIsVastOnMultiFormatImp() throws JsonProcessingException {
+        // given
+        final Bid bid = Bid.builder().impid("321").adm("<VAST version=\"4.0\"></VAST>").build();
+        final BidderCall<BidRequest> httpCall = givenHttpCall(givenMultiFormatImp(), bid);
+
+        // when
+        final Result<List<BidderBid>> result = target.makeBids(httpCall, null);
+
+        // then
+        assertThat(result.getErrors()).isEmpty();
+        assertThat(result.getValue()).containsOnly(BidderBid.of(bid, video, "USD"));
+    }
+
+    @Test
+    public void makeBidsShouldReturnBannerBidWhenNoMtypeAndAdmIsHtmlOnMultiFormatImp() throws JsonProcessingException {
+        // given
+        final Bid bid = Bid.builder().impid("321").adm("<div>ad</div>").build();
+        final BidderCall<BidRequest> httpCall = givenHttpCall(givenMultiFormatImp(), bid);
+
+        // when
+        final Result<List<BidderBid>> result = target.makeBids(httpCall, null);
+
+        // then
+        assertThat(result.getErrors()).isEmpty();
+        assertThat(result.getValue()).containsOnly(BidderBid.of(bid, banner, "USD"));
+    }
+
+    @Test
+    public void makeBidsShouldReturnVideoBidWhenVastFollowsXmlDeclaration() throws JsonProcessingException {
+        // given
+        final Bid bid = Bid.builder()
+                .impid("321")
+                .adm("<?xml version=\"1.0\" ?><VAST version=\"2.0\"><Ad></Ad></VAST>")
+                .build();
+        final BidderCall<BidRequest> httpCall = givenHttpCall(givenMultiFormatImp(), bid);
+
+        // when
+        final Result<List<BidderBid>> result = target.makeBids(httpCall, null);
+
+        // then
+        assertThat(result.getErrors()).isEmpty();
+        assertThat(result.getValue()).containsOnly(BidderBid.of(bid, video, "USD"));
+    }
+
+    @Test
+    public void makeBidsShouldReturnVideoBidWhenVastAttributesStartOnNextLine() throws JsonProcessingException {
+        // given
+        final Bid bid = Bid.builder().impid("321").adm("<VAST\n  version=\"4.0\"></VAST>").build();
+        final BidderCall<BidRequest> httpCall = givenHttpCall(givenMultiFormatImp(), bid);
+
+        // when
+        final Result<List<BidderBid>> result = target.makeBids(httpCall, null);
+
+        // then
+        assertThat(result.getErrors()).isEmpty();
+        assertThat(result.getValue()).containsOnly(BidderBid.of(bid, video, "USD"));
+    }
+
+    @Test
+    public void makeBidsShouldReturnBannerBidWhenVastTagIsLowercase() throws JsonProcessingException {
+        // given
+        final Bid bid = Bid.builder().impid("321").adm("<vast version=\"4.0\"></vast>").build();
+        final BidderCall<BidRequest> httpCall = givenHttpCall(givenMultiFormatImp(), bid);
+
+        // when
+        final Result<List<BidderBid>> result = target.makeBids(httpCall, null);
+
+        // then
+        assertThat(result.getErrors()).isEmpty();
+        assertThat(result.getValue()).containsOnly(BidderBid.of(bid, banner, "USD"));
+    }
+
+    @Test
+    public void makeBidsShouldReturnBannerBidWhenAdmHasNoVastElement() throws JsonProcessingException {
+        // given
+        final Bid bid = Bid.builder().impid("321").adm("<VASTAdTagURI>u</VASTAdTagURI>").build();
+        final BidderCall<BidRequest> httpCall = givenHttpCall(givenMultiFormatImp(), bid);
+
+        // when
+        final Result<List<BidderBid>> result = target.makeBids(httpCall, null);
+
+        // then
+        assertThat(result.getErrors()).isEmpty();
+        assertThat(result.getValue()).containsOnly(BidderBid.of(bid, banner, "USD"));
+    }
+
+    @Test
+    public void makeBidsShouldReturnBannerBidWhenAdmMentionsVastOnlyAsText() throws JsonProcessingException {
+        // given
+        final Bid bid = Bid.builder().impid("321").adm("<div>VAST</div>").build();
+        final BidderCall<BidRequest> httpCall = givenHttpCall(givenMultiFormatImp(), bid);
+
+        // when
+        final Result<List<BidderBid>> result = target.makeBids(httpCall, null);
+
+        // then
+        assertThat(result.getErrors()).isEmpty();
+        assertThat(result.getValue()).containsOnly(BidderBid.of(bid, banner, "USD"));
+    }
+
+    @Test
+    public void makeBidsShouldReturnBannerBidWhenNoMtypeAndNoAdmOnMultiFormatImp() throws JsonProcessingException {
+        // given
+        final Bid bid = Bid.builder().impid("321").build();
+        final BidderCall<BidRequest> httpCall = givenHttpCall(givenMultiFormatImp(), bid);
+
+        // when
+        final Result<List<BidderBid>> result = target.makeBids(httpCall, null);
+
+        // then
+        assertThat(result.getErrors()).isEmpty();
+        assertThat(result.getValue()).containsOnly(BidderBid.of(bid, banner, "USD"));
+    }
+
+    @Test
+    public void makeBidsShouldReturnBannerBidWhenNoMtypeOnBannerOnlyImp() throws JsonProcessingException {
+        // given
+        final Bid bid = Bid.builder().impid("321").adm("<div>ad</div>").build();
+        final Imp bannerOnlyImp = Imp.builder().id("321").banner(Banner.builder().build()).build();
+        final BidderCall<BidRequest> httpCall = givenHttpCall(bannerOnlyImp, bid);
+
+        // when
+        final Result<List<BidderBid>> result = target.makeBids(httpCall, null);
+
+        // then
+        assertThat(result.getErrors()).isEmpty();
+        assertThat(result.getValue()).containsOnly(BidderBid.of(bid, banner, "USD"));
+    }
+
     @Test
     public void makeHttpRequestsShouldPreserveTopLevel26RegsAndExtTypedFields() {
         // given
@@ -955,10 +1162,27 @@ private static BidResponse givenBidResponse(Function<Bid.BidBuilder, Bid.BidBuil
                 .build();
     }
 
+    private static Imp givenMultiFormatImp() {
+        return Imp.builder()
+                .id("321")
+                .banner(Banner.builder().build())
+                .video(Video.builder().build())
+                .build();
+    }
+
     private static BidderCall<BidRequest> givenHttpCall(BidRequest bidRequest, String body) {
         return BidderCall.succeededHttp(
                 HttpRequest.<BidRequest>builder().payload(bidRequest).build(),
                 HttpResponse.of(200, null, body),
                 null);
     }
+
+    private static BidderCall<BidRequest> givenHttpCall(Imp imp, Bid... bids) throws JsonProcessingException {
+        return givenHttpCall(
+                BidRequest.builder().imp(singletonList(imp)).build(),
+                mapper.writeValueAsString(BidResponse.builder()
+                        .cur("USD")
+                        .seatbid(singletonList(SeatBid.builder().bid(asList(bids)).build()))
+                        .build()));
+    }
 }