  YZ Phe is a very short-period contact binary (Sp.= $K2\,V$) with an orbital
period of 0.2347 days near the short period limit (0.22 d). We present the
complete light curves in $VRI$ bands, which photometric data were obtained with
the 0.61-m telescope of PROMPT-8 at CTIO in Chile during June to October 2016
and August 2017. The photometric solutions were determined by using the W-D
method and the results reveal that YZ Phe is a W-subtype shallow contact binary
($f\sim$ 10%, $q$ = 2.635 or $1/q$ = 0.379 for W subtype) with rotational
motion of a large hot spot on the more massive component, showing a strong
O'Connell effect with variation of maxima in photometric time series at period
of 4.20 yr and stellar cycle at period of 1.28 yr. By compiling all available
eclipse times, the result shows a long-term period decrease at a rate of
$\mathrm{d}P/\mathrm{d}t = -2.64(\pm 0.02)\times 10^{-8}$ d $yr^{-1}$,
superimposed on a cyclic variation ($A_3$ = 0.0081 days and $P_3$ = 40.76
years). This variation cannot be explained by Applegate mechanism. Thus, the
cyclic change may be interpreted as light-travel time effect via the presence
of a cool third body. Based on photometric solutions, the third light was
detected with 2% contribution of total light in $V$ and $I$ bands. Those
support the existence of a third body. For the long-term period decrease, it
can be explained by mass transfer from the more massive component ($M_2 \sim
0.74 M_{\odot}$) to the less massive one ($M_1 \sim 0.28 M_{\odot}$) or plus
AML via magnetic braking. With $1/q$ $<$ 0.4 and long-term period decrease, all
suggest that YZ Phe is on the AML-controlled state and its fill-out factor will
increase, as well as the system will evolve into a deeper normal contact
binary.
