The Drosophila melanogaster warts/lats tumour suppressor has two mammalian counterparts LATS1/Warts-1 and LATS2/Kpm. Here, we show that mammalian Lats orthologues exhibit distinct expression profiles according to germ cell layer origin. Lats2(-/-) embryos show overgrowth in restricted tissues of mesodermal lineage; however, lethality ultimately ensues on or before embryonic day 12.5 preceded by defective proliferation. Lats2(-/-) mouse embryonic fibroblasts (MEFs) acquire growth advantages and display a profound defect in contact inhibition of growth, yet exhibit defective cytokinesis. Lats2(-/-) embryos and MEFs display centrosome amplification and genomic instability. Lats2 localizes to centrosomes and overexpression of Lats2 suppresses centrosome overduplication induced in wild-type MEFs and reverses centrosome amplification inherent in Lats2(-/-) MEFs. These findings indicate an essential role of Lats2 in the integrity of processes that govern centrosome duplication, maintenance of mitotic fidelity and genomic stability.