The leg yield is one of the first lateral movements a pony should learn. It is not too difficult to perform, and lays the foundation for further lateral work such as the half pass, and side pass. The leg yield, just like the half pass, requires forward movement. While the pony is moving forward, he will yield to the rider's leg while maintaining his forward movement. In so doing, the pony will likely have to cross his legs to achieve the diagonal movement, but the pony should have more forward than sideways movement.
A leg yield can be formed at any gait, but let's start with a leg yield at the walk before trying it at other gaits. Let's start by trying to get our pony to leg yield to the left. At the walk, flex your pony to the right (since we will want a leg yield to the left). To get the flexion, apply a little tension to the right rein making sure to keep the pony moving at a nice walk along a straight line. Now, ask the pony to yield to your right "leg" by flicking his right side with you whip. He should now be flexed slightly to the right, but moving forwards and to the left.