Acetylation of α-tubulin on lysine 40 marks long-lived microtubules in structures such as axons and cilia, and yet the physiological role of α-tubulin K40 acetylation is elusive. Although genetic ablation of the α-tubulin K40 acetyltransferase αTat1 in mice did not lead to detectable phenotypes in the developing animals, contact inhibition of proliferation and cell-substrate adhesion were significantly compromised in cultured αTat1(-/-) fibroblasts. First, αTat1(-/-) fibroblasts kept proliferating beyond the confluent monolayer stage. Congruently, αTat1(-/-) cells failed to activate Hippo signaling in response to increased cell density, and the microtubule association of the Hippo regulator Merlin was disrupted. Second, αTat1(-/-) cells contained very few focal adhesions, and their ability to adhere to growth surfaces was greatly impaired. Whereas the catalytic activity of αTAT1 was dispensable for monolayer formation, it was necessary for cell adhesion and restrained cell proliferation and activation of the Hippo pathway at elevated cell density. Because α-tubulin K40 acetylation is largely eliminated by deletion of αTAT1, we propose that acetylated microtubules regulate contact inhibition of proliferation through the Hippo pathway.