A new sodium-yttrium borohydride-chloride, NaY(BH4)2Cl2, is obtained by a combination of mechanochemical synthesis and annealing of NaBH4–YCl3 mixtures and is characterized by in-situ synchrotron radiation X-ray powder diffraction, density functional theory, thermal analysis and vibrational spectroscopy. Several simultaneous and coupled reactions occur during the synthesis, also yielding Na3YCl6 and Na(BH4)1−xClx besides the title compound. The polymeric pseudo-orthorhombic crystal structure of NaY(BH4)2Cl2 (space group P2/c) is built of edge- and corner-sharing octahedral coordination polyhedra of yttrium (4Cl + 2BH4) and sodium (2Cl + 4BH4). The structure is isomorphous to the high temperature polymorph of NaYCl4. The BH4 units in NaY(BH4)2Cl2 are located only on the larger of the two independent anion sites in NaYCl4. Density functional theory optimization of the experimental structure suggests that the BH4 units act as η3-ligands (face-sharing) towards yttrium and η1-ligands (corner-sharing) towards sodium. Raman spectroscopy confirms this BH4 configuration. NaY(BH4)2Cl2 decomposes at ∼300 °C under formation of Na3YCl6, while the latter compound at higher temperatures reacts with Na(BH4)1−xClx to form NaCl and possibly amorphous products. The reactions are associated with mass losses of 2.62 and 3.78 wt% for the NaBH4–YCl3 (3:1) and (4:1) samples, respectively.