The Hippo signalling pathway controls proliferation via negative regulation of its two effector proteins, Yes-associated protein (YAP) and transcriptional coactivator with PDZ-binding motif (TAZ). YAP and TAZ are transcriptional coactivators that can regulate a number of genes involved in cell proliferation and apoptosis. YAP knockdown using shRNA in liver progenitor cells (LPCs) significantly decreased their proliferation rate, however the effect diminished with cell passaging. The ‘recovered’ cells maintained efficient YAP knockdown therefore it was hypothesised that TAZ was up-regulated in the knockdown cells to compensate for YAP depletion. TAZ abundance was significantly increased in the YAP knockdown cells compared with control shRNA cells. Conversely, when YAP was induced in several cell lines including LPCs and fibroblasts TAZ abundance was significantly reduced within 16h of YAP induction. Treatment of NIH3T3 fibroblasts with the inhibitors, cycloheximide and/or MG-132, revealed that TAZ is an unstable protein in contrast with YAP. Blocking nuclear export using leptomycin B, inhibited YAP-induced degradation of TAZ indicating that TAZ must be cytosolic for this to occur. Mutant studies indicate that the c-terminal transcriptional activation domain and PDZ binding motif of YAP are required to induce TAZ degradation. Collectively these results show YAP abundance negatively correlates with and directly affects TAZ abundance. Current work is focused on elucidating the mechanism of TAZ regulation. This result has implications for YAP/TAZ targeting strategies in cancer therapy as both are bona fide oncogenes and have common targets such as Survivin, a regulator of mitosis.