North Yemen and South Yemen were unified on the 22nd of May, 1990 to form the Republic of Yemen. This very flag was also adopted on that day. Actually, the flag resembles the Arab Liberation Flag of 1952, which was the inspiration for the flags of South and North Yemen and some other African flags. It was decided to choose it as a flag of a new country, as it corresponded with Yemeni beliefs, traditions and plans for the future.

The red color here symbolizes the bloodshed of martyrs and unity; the white color represents a bright and promising future; the black color doesn't let the people of Yemen forget the dark past, which is an important part of Yemen's history.

More Info: en.wikipedia.org