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.