YAP (yes-associated protein) and TAZ are oncogenic transcriptional co-activators downstream of the Hippo tumor-suppressor pathway. However, whether YAP and/or TAZ (YAP/TAZ) engage in transcriptional co-repression remains relatively unexplored. Here, we directly demonstrated that YAP/TAZ represses numerous target genes, including tumor-suppressor genes such as DDIT4 (DNA-damage-inducible transcript 4) and Trail (TNF-related apoptosis-inducing ligand). Mechanistically, the repressor function of YAP/TAZ requires TEAD (TEA domain) transcription factors. A YAP/TAZ-TEAD complex recruits the NuRD complex to deacetylate histones and alters nucleosome occupancy at target genes. Functionally, repression of DDIT4 and Trail by YAP/TAZ is required for mTORC1 (mechanistic target of rapamycin complex 1) activation and cell survival, respectively. Our demonstration of the transcriptional co-repressor activity of YAP/TAZ opens a new avenue for understanding the Hippo signaling pathway.