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Powerful demons have white eyes when they go all demonic, demons such as Lilith, and Alastair. Lesser but powerful demons still only have black eyes, such as Meg and Ruby.

But there is only one Yellow Eyes.

What makes him special?

(Please note I've only just finished watching season 5, so please use the >! tag appropriately.)

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There's several types of demons:

  • White-eyed demons are by far the most powerful. Lilith and Alastair are the only two known ones so far.
  • Black-eyed demons are in general the weakest in terms of raw power and abilities. They're simply the most common.
  • Crossroads demons generally have red eyes, and are far more self-serving than other types of demons.
    • Of special note is Crowley, who was the leader of the Crossroads demons back when he first appeared. I had thought he was a black-eyed demon, but the SupernaturalWiki notes that he has never shown the color of his eyes. EDIT: See my answer here about Crowley.

And at least two that are unique with respect to their eyes:

  • Samhain was a demon with a specific role, and his eye pattern is also unique - most of the eye turns white like the White-eyed demons, but the pupils stay black.
  • Azazel seems to be the only yellow-eyed demon. It's been implied that he was king of Hell while Lucifer was trapped (although I don't think it was outright stated; he may have just had a high rank), and has been called the "tyrant who held the demons all together" by another black-eyed demon. More that I don't recall when it was revealed:

He shares the same resurrection powers as Crossroads demons, can possess Reapers, and was the one that not only discovered Lucifer was still alive, but also went about trying to free him on Lucifer's orders. Given that Lucifer created demons in the first place, I suspect Lucifer somehow managed to give Azazel a power boost that turned him into the only Yellow-eyed demon - but this is pure theory.

So, as an answer, there's two possibilities I can think of: Yellow-eyed demons are some sort of special "leader"-styled demon that generally never leave Hell (and are of a lower power level than White-eyed demons), or what I theorized in the spoilered section.

LATE EDIT

As of Season 12, we have an answer:

The Princes of Hell are the first generation of demons Lucifer created, meant to be the leaders of demon armies. All of them have yellow eyes.

By modern times, all of them except Azazel have lived on Earth and kept to themselves, staying out of Hell's business and avoiding the attention of hunters. Azazel alone was a "true believer" who still followed Lucifer, however one of them seems to be interested in Lucifer's offspring.

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    It should be noted that Crowley is unusual any number of ways. He is the first one depicted that could teleport away. He's never been shown to "smoke" out of his body, and it may even be true that somehow this is his original body. As for Azazel, he is the only named demon with an ancient name. Alastair is a Scottish name, after all, and no older than about 1200 years, Lilith is seen even today in some cases. Crowley, Meg, etc. Azazel may be one of Lucifer's original demons.
    – John O
    Commented Jul 29, 2012 at 21:25
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    @JohnO Not his original body, the bones were found in Season 6.
    – Izkata
    Commented Jul 29, 2012 at 23:32
  • A duplicate of it, then, if you prefer.
    – John O
    Commented Jul 30, 2012 at 1:12
  • Also note that even the demons seem to recognize that Azazel's eyes are odd; the first time we hear his name, I think, is from Casey who says something like "you don't think we call him 'old yellow-eyes' do you?"
    – KutuluMike
    Commented Jul 31, 2012 at 18:39
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    @Lilith is certainly an ancient name, as she is sometimes considered Adams first wife.
    – AncientSwordRage ♦
    Commented Aug 1, 2012 at 16:52
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I think a major factor is just that the show was still in its conceptual stages when Yellow Eyes came into the picture. Heck from season 1 to 2 there is a major jump in the ideas of Demons in the show. I think that "Yellow-Eyes" was a way to highlight the character's significance since he and his actions held central role in the plot from season 1-5.

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Based on past episodes it is possible the yellow eyed demon is the first pure demon, meaning he wasn't born human but created by Lucifer as demon where as Lilith is simply the first human turned demon by Lucifer.

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Azazel does need a vessel, when he died we saw black smoke leave the body he was possessing. I don't think he's an angel though, I think he has yellow eyes because he was one of the first demons created by Lucifer, otherwise he would have normal looking or white eyes. Just a theory.

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    "Just a theory" - not good enough. We prefer our theories to have reasoning and supporting evidence.
    – Gallifreyan
    Commented Mar 28, 2017 at 19:18

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