The Yellow Wallpaper is a classic gothic horror story by Charlotte Perkins Gilman, and mainly concerns the slow progress of mental illness.
The protagonist, who is never named, is suffering from post-partum depression upon the birth of a child, and is prescribed strict best-rest by a doctor. In the setting, this is considered completely reasonable, and she is prohibited from any activity, even non-strenuous ones such as reading. With no other mental stimulation, she creates a trapped woman in the yellow wallpaper, eventually trapping herself in madness.
The yellow wallpaper is significant because yellow is often considered the color of sickness or malaise. Ancient medicine colored the "humors" of the body; the Choleric humor was yellow bile, representing fire, or a creative, passionate, unstable mentality. The protagonist is certainly unstable, and her creativity shows in her belief that the wallpaper hides a trapped woman (which is itself an unsubtle echo of her own imprisonment). She mentions the "smell" of yellow pervading the house, which brings to mind mold or mildew, which in an unventilated home could cause a fungal infection; even the thought of a "yellow smell" is repugnant. Finally, the symbolic association of cowardice with the color yellow could be a condemnation of the woman's refusal to fight against the oppressive patriarchal society which has imprisoned her, instead becoming "yellow" and retreating into madness and submission.