How extracellular cues are transduced to the nucleus is a fundamental issue in biology. The paralogous WW-domain proteins YAP (Yes-associated protein) and TAZ (transcriptional coactivator with PDZ-binding motif; also known as WWTR1, for WW-domain containing transcription regulator 1) constitute a pair of transducers linking cytoplasmic signaling events to transcriptional regulation in the nucleus. A cascade composed of mammalian Ste20-like (MST) and large tumor suppressor (LATS) kinases directs multisite phosphorylation, promotes 14-3-3 binding, and hinders nuclear import of YAP and TAZ, thereby inhibiting their transcriptional coactivator and growth-promoting activities. A similar cascade regulates the trafficking and function of Yorkie, the fly orthologue of YAP. Mammalian YAP and TAZ are expressed in various tissues and serve as coregulators for transcriptional enhancer factors (TEFs; also referred to as TEADs, for TEA-domain proteins), runt-domain transcription factors (Runxs), peroxisome proliferator-activated receptor gamma (PPARgamma), T-box transcription factor 5 (Tbx5), and several others. YAP and TAZ play distinct roles during mouse development. Both, and their upstream regulators, are intimately linked to tumorigenesis and other pathogenic processes. Here, we review studies on this family of signal-responsive transcriptional coregulators and emphasize how relative sequence conservation predicates their function and regulation, to provide a conceptual framework for organizing available information and seeking new knowledge about these signal transducers.