The expanding and contracting yo-yo is a spool formed by a pair of disks connected by a narrow diameter pin having a string wound around the pin. At least one, and preferably both, of the disks has a plurality of overlapping wings (also referred to as air foils or leaves) pivotally attached to the periphery of the outer face of the disk. A biasing member causes the wings to remain in a closed dome configuration until the disks begin to spin. When the yo-yo is dropped and pulled back in, centrifugal force, centripetal force, alternate lift and drag of air flow, and resilient bias cause the wings to alternately pivot and unfold outward, followed by pivoting inward to a dome shape. In an alternative embodiment, the wings may be formed with a resilient living hinge that permits the wings to expand and contract against the body of the yo-yo.