After 206 days on strike, joyless United Auto Workers have voted nearly 2 to 1 to return to work at Caterpillar Tractor Co. here, signaling an end to the longest walkout in the union's history and the bitterest of the current recession.

In the end, the workers came away with little to show for their winter struggle with the company, derided on picketers' signs as "The Yellow God."

The proposed contract, which would run three years, would freeze basic wages and make other concessions but would retain quarterly cost-of-living adjustments and add a profit-sharing plan.

Recessions, with their slack demand and soft labor markets, are not good times to strike. There were 235 major work stoppages in 1979 involving 1 million workers, but only 96 last year involving 656,000. Many strong unions last year agreed to "givebacks."

The Caterpillar workers say their decision to strike anyway last Oct. 1 was forced on them by the company. It leaves a legacy of frustration and ill will not only between the workers and Caterpillar but within the UAW. Meanwhile, the local economy has suffered a body blow, and some strikers lost their homes.

"There's nothing you can do but go along with them," said a 27-year Caterpillar employe who said he survived by using up his savings. "There's so many people hurting, and hurting bad."

"Personally in my heart, I feel like we've let the people down," said union official Wayne Schmidt after the vote was announced early this morning.

"I don't think anybody's happy with the settlement. It's going to be hard to live with. But we had to get back to work," said Dan Hartman, a tractor assembler who said he thinks he has "forgot how."

Peoria Local 974, with 12,000 members, is by far the largest of the 10 "Cat" locals. The voting by smaller locals in six states is under way and will be finished by Saturday evening, officials said. It is expected to follow the Peoria pattern.

It was only under pressure from the international union that the UAW's Caterpillar bargaining committee agreed to submit the company's latest offer to a vote by the full membership. It did so without a favorable recommendation. The bargaining committee originally had voted 26 to 3 not to recommend the offer to members.

Today, Local 974 President Jim O'Connor acknowledged that "there was some bitterness" among local bargainers toward the international, particularly toward Vice President Stephen Yokich, the chief negotiator who forced the issue. Yokich had concluded that the offer was the best the union could get.

Among the biggest losses in the proffered agreement, workers said, are various money concessions, such as elimination of guaranteed wage increases of 3 percent per year and credits for time off.

But the union will keep its quarterly cost-of-living adjustment, seniority rights were preserved and there will be guaranteed profit-sharing payments in 1984 of at least 31 cents for each hour worked that year. One of the sorest points is that the concessions made by the union, in contrast to other UAW concession contracts, will not be restored later but are permanent, officials said.

Union officials contend that they were in a no-win situation from the beginning, forced into the strike by a company with a large recession-fat inventory of its trademark-yellow construction equipment and thousands of workers already on layoff.

The company last fall made a proposal filled with obviously unworkable demands for union "giveback" in some 70 areas, many that went "to the very guts of the union," O'Connor said.

Corrugated tin and cardboard shacks went up outside Caterpillar plants to shelter picketers through the winter. As the strike dragged on, prayer vigils were held to call for a solution. Local 974, considered relatively militant, took some heat from other locals.

Meanwhile, Caterpillar Tractor dealers were describing the effects of the strike on them as "minimal."

In January, Standard & Poor's Corp. put Caterpillar on its CreditWatch list. In February, Moody's Inc. dropped Peoria County's credit rating from AA to A, because of concern over the strike and generally high unemployment.

Since January, despite special financial arrangements to assist strikers, 103 foreclosures have been filed in Peoria County. Lending institutions report up to half the property they own now was acquired through deeds in lieu of foreclosure, according to the Peoria Journal Star. Peoples Savings reported up to four deeds coming in weekly.

"They are handing over the keys, saying I'm through. It's tough out there," said credit manager Cindy Dietrich of Peoria Savings & Loan Association.

The Construction Equipment Credit Corp. said it has repossessed 17 homes and 80 cars.

Last week, Caterpillar announced a $172 million first-quarter loss, and a sales drop of 60 percent. The UAW's O'Connor today called the company's strategy on the strike "ruthless and unfair."

"I'm not saying we're Boy Scouts and we've always been right. But I think Caterpillar management made one of the worst decisions that could have been made . . . . Something needs to happen because this has got to be one of the worst relationships in the country."

The company has declined comment except to say that the workers are expected to return for the late Sunday shift pending nationwide ratification of the proposal.