The 32-year-old batsman, who amassed 1,788 runs last year - a world record for a calendar year - was not deemed fit enough by selectors who have focused on youth for the shortest version of the game.
Chief selector Salahuddin Ahmed praised Yousuf as a world class player and said his omission was to field younger players.
"By dropping Yousuf we have not degraded him, he remains a world class player and has a lot to offer to Pakistan cricket. He is not in the team because we wanted to try some youngsters," said Ahmed.
Yousuf has played 75 Tests and 242 one-day internationals for Pakistan.
Also excluded is 27-year-old Razzaq who missed the disastrous World Cup campaign in the Caribbean because of a knee injury. Razzaq, a veteran of 231 one-day internationals, missed the later part of a training camp last week due to fever.
"We have rested Razzaq and he too has a lot to offer to Pakistan cricket. There should be no ego problems after we have not included these two great players, it's a matter of the team and the country," said Ahmed.
Fast bowler Shoaib Akhtar has been included despite missing the major portion of a training camp here last week due to a neck injury but his pace partner Mohammad Sami failed selection.
"Team doctor has confirmed Akhtar is fit and we have included him in the squad," said the chief selector.
Akhtar also missed the 50-over World Cup in the West Indies in March-April because of injury.
Ahmed said Pakistan have opted for several specialists in the Twenty20 squad.
"We have taken a lot of points under consideration and also included performers of the Twenty20 domestic event held in Pakistan."
The 15-man party is captained by all-rounder Shoaib Malik and also includes left-arm spinner Abdul Rahman.
Pakistan open their campaign in the Twenty20 World Cup with a match against qualifiers Scotland at Durban on September 12 and then take on arch rivals India at the same venue two days later.
Top two teams qualify for the round of Eight.
Squad: Shoaib Malik (capt), Salman Butt (vice capt), Mohammad Hafeez, Imran Nazir, Younis Khan, Misbahul Haq, Shahid Afridi, Yasir Arafat, Kamran Akmal, Abdul Rahman, Shoaib Akhtar, Mohammad Asif, Umar Gul, Rao Iftikhar, Fawad Alam