What is YOURLS?
YOURLS is a small set of PHP scripts that will allow you to run your own URL shortening service (a la TinyURL). You can make it private or public, you can pick custom keyword URLs, it comes with its own API. You will love it.
There’s a WordPress plugin available for YOURLS, making integration with your blog a snap: create short URLs and tweet them automagically as you publish blog posts.
Check out Ozh blog post on the announcement, Introducing YOURLS (Your Own URL Shortener) and its WordPress Plugin Companion.
YOURLS comes with a WordPress Plugin as well and this plugin is developed by Ozh.
YOURLS WordPress Plugin
This plugin, YOURLS: WordPress to Twitter, is the bridge between YOURLS, Twitter and your blog: when you publish a post or a page, it will use your own YOURLS install, either hosted on the same webserver, or another server, to create a short URL for your post and send it to your Twitter account. The plugin also works with public popular services such as TinyURL, tr.im, is.gd or bit.ly.
Check out Ozh blog post on the WordPress plugin, YOURLS: WordPress To Twitter (a Short URL Plugin).
Official Site: YOURLS: Your Own URL Shortener