TAZ, as a crucial effector of Hippo pathway, is required for spermatogenesis and fertilization, but little is known regarding its physiological function in uterine decidualization. In this study, we showed that TAZ was localized in the decidua, where it promoted stromal cell proliferation followed by accelerated G1/S phase transition via Ccnd3 and Cdk4 and induced the expression or activity of stromal differentiation markers Prl8a2, Prl3c1 and ALP, indicating the importance of TAZ in decidualization. Knockdown of TAZ impeded HB-EGF induction of stromal cell proliferation and differentiation. Under oxidative stress, TAZ protected stromal differentiation against oxidative damage by reducing intracellular ROS and enhancing cellular antioxidant capacity dependent on the Nrf2/ARE/Foxo1 pathway. TAZ strengthened the transcriptional activity of Nrf2 which directly bound to the antioxidant response element (ARE) of Foxo1 promoter region. Additionally, silencing TAZ caused accumulation of intracellular ROS through heightening NOX activity whose blockade by APO reversed the disruption in stromal differentiation. Further analysis revealed that TAZ might restore mitochondrial function, as indicated by the increase in ATP level, mtDNA copy number and mitochondrial membrane potential with the reduction in mitochondrial superoxide. Additionally, TAZ modulated the activities of mitochondrial respiratory chain complexes I and III whose suppression by ROT and AA resulted in the inability of TAZ to defend against oxidative damage to stromal differentiation. Moreover, TAZ prevented stromal cell apoptosis by upregulating Bcl2 expression and inhibiting Casp3 activity and Bax expression. In summary, TAZ might mediate HB-EGF function in uterine decidualization through Ccnd3 and ameliorate oxidative damage to stromal cell differentiation via Nrf2/ARE/Foxo1 pathway.