The service is currently available to mobile phone users in the US, Canada, India and the Philippines.
John Kremer, vice president of Yahoo Mail, claimed that the new features create a "more social" email experience.
The text messaging feature is integrated into the interface and works in almost exactly the same way as standard emailing, but users enter a phone number instead of an email address. Each message is limited to 150 characters.
Unlike a traditional email inbox, the system creates an instant message style interface to allow users to track the course of the conversation.
Users also have the option of connecting to their contacts via Yahoo Messenger or Windows Live Messenger through the Mail interface.
They can also convert email messages into IM chats or switch to a text message dialogue if the person they are chatting to comes online or goes mobile.
Campaigners want US authorities to break-up Instagram, WhatsApp and Messenger into separate companies
The perception of the industry as "a white man in a hard hat" is limiting new applicants, says Hayaatun Sillem
Almost two years late - and just as AMD is readying 7nm Zen 2 for early 2019
Eye-wateringly expensive smart speakers take just six per cent market share, claims Strategy Analytics