That week will be very crowded. All summer is very crowded. It is what it is. You can still see things and walk the boardwalks. Just know that it will take you longer to drive places. If you want to lose the crowds, you just have to walk about 2 miles away on a trail and poof they are really reduced. Most people stay on the paved walks.

Parking anywhere is horrible.

Get up early in the morning to see the most popular sites with fewer people.

If you can get at least one night at Mammoth (cabin or room), do it instead of Gardiner, It gives you a few minutes head start on the people in Gardiner. There are often elk wandering around Mammoth. I only saw one elk crossing the bridge in Gardiner. Park at or near the library in Gardiner to spend a couple minutes admiring the Roosevelt Arch at the south end of Gardiner. Numbers on the arch are the clue for a mystery geocache that is at the library.

If we move our trip to one week earlier will it make much of a difference?

Sure it would help a bit. Fourth of July week is the very busiest summer week everywhere. If you can be out of there before the holiday crowds descend - all to the good. It will still be crowded but not nearly as bad.

Not sure all of the above responses are from people who were ACTUALLY in the park the 4th of July week. Think a lot of assumptions were made. We were in the park the 4th of July week two years ago. Split our time between the Yellowstone Lake Lodge (lovely) and the Old Faithful Inn over the 4th. The park was crowded and traffic movement was slow for most of the week. Often mid-day parking at many of the small geysers areas was a problem with the parking spreading on to the roads. The larger geyser areas were OK but sometimes had to hunt. Turn over in the larger lots is pretty good. The park was hot. Our pattern was to hit the smaller geysers in the early AM (7/8-10). And retreat to our lodge for mid-heat and shaded activities. Then go out later in the PM. The park really thins out by 4 or 5 pm when all of the people staying outside of the park, who are very hot and tired with screaming kids, head back. It is light till nearly 9 o'clock and crowds are very light. Great time to hit the walking trails and easily drive anywhere. In some ways the evening time in the park was terrific. Great for pictures with the low, yellow, evening light. We did a number of Ranger lead tours out of the center at Old Faithful. -- By the way - Old Faithful is a puny geyser but has a great clock. In the area around Old Faithful are there are some spectacular geyser that are unfortunately irregular but are more than worth the wait. The cool evening is a good time to wait.

The 4th was actually quite dead in the park. The rangers explained that since fireworks are ban in the park and no 4th celebration is hosted in the park, outside folks don't bother to come in on the 4th but stay outside of the park where there are big celebrations with fireworks. I would not move your week.

PS -- And there is very limited to none cell service in the park. Verison was the only service available and it was super weak, spotty, and undependable. And no wifi. AND if you have kids, contact the O Faithful Inn for evening flag retrieval. It is special and you will see parts of the Inn that no one else every sees. Only one family per night participates. But you cannot be afraid of heights or unable to climb, fairly steep wooden stairs. It is an experience

It's been awhile, but we also stayed at The Old Faithful Inn during 4th of July week. We were able to avoid the worst of the crowds by getting out early and then back to our room in afternoon and back out in the evening. If possible, bring a small cooler with sandwich fixings and drinks for a picnic so you don't waste time looking for a place to eat or need to wait in line.

I'm bookmarking for a future trip. Thanks for the good information.

Extending the original question: When do crowds at Yellowstone start fading? (not daytime, I mean around what time of the year)

The end of September and beginning of October can be a very beautiful time to visit. Less crowded and fall colors, maybe some snow.

We went around the 23rd or June and while there was some snow in the woods, the roads were fine. There were people there, but we never had trouble finding a parking spot at any of the sites. The best thing was the baby bison and elk frolicking around.

When school is in session, crowds are lessened.