YAP (Yes-associated protein) and TAZ (transcriptional coactivator with PDZ-binding motif) are major downstream effectors of the Hippo pathway that influences tissue homeostasis, organ size, and cancer development. Aberrant hyperactivation of YAP/TAZ causes tissue overgrowth and tumorigenesis, whereas their inactivation impairs tissue development and regeneration. Dynamic and precise control of YAP/TAZ activity is thus important to ensure proper physiological regulation and homeostasis of the cells. Here, we show that YAP/TAZ activation results in activation of their negative regulators, LATS1/2 (large tumor suppressor 1/2) kinases, to constitute a negative feedback loop of the Hippo pathway in both cultured cells and mouse tissues. YAP/TAZ in complex with the transcription factor TEAD (TEA domain family member) directly induce LATS2 expression. Furthermore, YAP/TAZ also stimulate the kinase activity of LATS1/2 through inducing NF2 (neurofibromin 2). This feedback regulation is responsible for the transient activation of YAP upon lysophosphatidic acid (LPA) stimulation and the inhibition of YAP-induced cell migration. Thus, this LATS-mediated feedback loop provides an efficient mechanism to establish the robustness and homeostasis of YAP/TAZ regulation. Yes-associated protein (YAP) and transcriptional coactivator with PDZ-binding motif (TAZ; also known as WWTR1) play pivotal roles in regulating cell proliferation, survival, and differentiation; organ development; regeneration; and stem cell biology (Barry and Camargo 2013;Johnson and Halder 2014;Mo et al. 2014;Piccolo et al. 2014). YAP and TAZ share ∼50% amino acid sequence identity with a similar domain organization, each containing a TEAD (TEA domain family member)-binding domain, a WW domain, and a C-terminal transactivation domain. YAP and TAZ are transcriptional coactivators that shuttle between the cytoplasm and the nucleus, where they associate with several transcription factorsmainly TEAD transcription factors (Zhao et al. 2008).