YouTube will remove videos which insult people based on "protected attributes" such as race, gender and sexual orientation.
On Wednesday, the company announced it would take a "stronger stance" against personal attacks and threatening language.
It will now ban "veiled and "implied" threats as well as explicit ones. Simulated violence and threats of violence will also be banned.
The new policy applies to the comments on the platform as well as the content.
YouTube has been reviewing its guidelines for two years, according to the company's vice president of trust and safety Matt Halprin.
The website tries to find a balance between allowing freedom of expression and keeping hate speech to a minimum, Halprin told the Associated Press.
YouTube's new policy comes after the website received immense backlash for allowing a right-wing comedian to target a gay journalist.
Steven Crowder repeatedly called Vox reporter Carlos Maza a "lispy queer," and "a gay Vox sprite" and a "token gay".
Maza posted a series of Tweets in May which highlighted the verbal abuse.
The Tweets went viral and at the time YouTube admitted the language was "hurtful" but did not act further as it did not violate its policies, reports Buzzfeed.
However, YouTube has now confirmed Crowder's videos violate the rules and will be removed.