Kaido-no-yu is one of the best of Yuzawa's town run onsens. It is on the side of Route 17 in Mitsumata, a short walk from the Mitsumata Car Park where you catch the gondola for Kagura Ski Resort. It is on the old Mikuni Highway trade route (kaido), hence the name.
Like many other public onsens it is not the biggest but there is enough room in the inside bath for about a dozen people (though the leaflet claims you can cram 20 in there), and Kaido-no-yu also boasts an outdoor bath which apparently can fit 10 (which would be intimate.) If you can see over the wooden fence you can get a nice view up the mountains that are behind the onsen, which were a lush green when we visited.
Entrance is by a ticket that you buy from the vending machine. It is one of the more expensive town onsen at five hundred yen per adult and two hundred yen per child, though that is half the price of a hotel spa, and a great deal for a long soak. The changing rooms are spacious with lockers for your clothes. The baths are made of stone and there is plenty of room for washing. Once you come out after your bath there are the obligatory massage chairs and a display case with a selection of historical tools. Local fruit and vegetable juices, soft drinks and yogurt are available if you need to rehydrate.
The water at Kaido-no-yu is supposed to be especially good for muscle pain. This could come in handy in the winter months as it is so close to Kagura Ski Resort and also on the road back from Tashiro and Naeba Ski Resorts if you are heading back to Yuzawa. Being just off the main road makes it incredibly convenient to drop in. I've never been in winter but can imagine that it can get pretty busy as people come off the slopes and head to the onsen to warm up. A recent addition to the area is the Mitsumata Road Station which is the other side of the car park to Kaido-no-yu. With a cafe and a small shop selling local produce, this is worth a few minutes of your time before or after your onsen.