Yanagihara's novel, the story of four college friends seeking fame and fortune in New York, is tipped to win by bookmakers William Hill and Coral.
It is the second year the prize is open to all authors writing in English, regardless of nationality.
The winner will be announced at London's Guildhall at around 21:45 BST.
This year's shortlist features two authors from the UK, two from the US and one each from Jamaica and Nigeria.
The shortlist of authors and titles is as follows:
Victory for either Yanagihara or Tyler would see the Man Booker have its first American winner.
Marlon James is the first Jamaican-born author to be shortlisted for the prize. William Hill said his novel, which explores the attempted assassination of Bob Marley in the late 1970s, had moved up from fifth favourite to second favourite.
This year's judges are Michael Wood (chair),  Ellah Wakatama Allfrey, John Burnside, Sam Leith and Frances Osborne.  They considered 156 books for this year's prize.
McCarthy is the only shortlisted author to have been nominated before, having been shortlisted for C in 2010.
At 28 years old, Obioma is the youngest nominee, the same age as 2013 winner Eleanor Catton.
The shortlisted authors each receive £2,500 and a specially bound edition of their book. The winner will receive a further cheque for £50,000.
Australian author Richard Flanagan won last year's prize for his wartime novel The Narrow Road to the Deep North.
Coverage from this year's ceremony, where the prize will be presented by the Duchess of Cornwall, will be on the BBC News Channel from 21:30 BST.

Griezmann has a haematoma on his left foot but Atletico said "an injury to the bone was ruled out" after an X-ray.
The 25-year-old is his team's top scorer in La Liga with six goals.
Atletico host league leaders Real at the Vicente Calderon trailing them by six points after 11 games.
Griezmann has returned to Madrid, meaning he will miss France's friendly against Ivory Coast on Tuesday, and will start treatment on Monday.

The Dow Jones fell 23.15 points to 18,529.42.
The wider S&P 500 was 1.23 points lower at 2,182.64, but the tech-heavy Nasdaq index gained 6.22 points to 5,244.60.
The announcement that US cancer drug firm Medivation would be purchased by pharmaceutical giant Pfizer sent its shares soaring 19.7%.
Pfizer shares were down 0.4%.
Crude prices fell 3.4% on signs of rising supplies. Brent crude fell to $49.16 a barrel, while US oil dropped to $47.43.
Oil giant Chevron dropped 0.4%, and Marathon Oil sank 7%.
Aside from the oil price fall, investors are cautious ahead of the annual meeting of central bankers later this week in Jackson Hole, Wyoming.
"It's oil and then we've got Jackson Hole hanging over us, and there is always some surprise that comes out of Jackson Hole," said Jack Ablin, chief investment officer at BMO Private Bank, in Chicago.
Federal Reserve chairwoman Janet Yellen will deliver a speech on Friday, which will be scrutinised for clues as to the timing of the next US interest rate rise.
Computer chipmaker Intersil jumped 19.8% after a report that Japanese firm Renesas was in the final stages of negotiations to buy it for $2.99bn.
The winner of the Man Booker Prize is announced shortly with Hanya Yanagihara's A Little Life the bookies' favourite to take the £50,000 prize.
[NEXT_CONCEPT]
Atletico Madrid forward Antoine Griezmann is a doubt for Saturday's derby against Real Madrid but did not suffer a broken foot in France's 2-1 win over Sweden on Friday.
[NEXT_CONCEPT]
(Closed): US shares were mixed, as a rise in biotech stocks offset a fall in energy shares caused by a sharp drop in the oil price.