Adipocyte differentiation from mesenchymal stem cells is governed by tightly regulated transcriptional and epigenetic programs. The Hippo pathway effectors YAP and TAZ impede this process, yet the underlying molecular mechanisms remain unclear. Here, we demonstrate how YAP/TAZ regulate transcription of the adipocyte lineage specification factor PPARγ and its target genes at the chromatin level. TAZ represses PPARγ-bound target enhancers as evidenced by a markedly reduced histone H3 acetylated at lysine-27 occupancy, resulting in the transcriptional repression of adipogenic genes, including Pparg2. Single-nucleus genomic analyses of mouse adipose tissue further revealed that YAP/TAZ activation drives extensive epigenetic modulation. Notably, the repressive effect of TAZ on adipogenic enhancers requires TEAD-dependent transcriptional activity, but not a direct interaction with PPARγ through the WW domain as previously reported. Last, we identified Vestigial-like 3 (Vgll3) as a transcriptional target of TAZ critical for repressing adipogenic enhancers. These findings reveal that the YAP/TAZ-VGLL3 axis regulates adipocyte fate by repressing the PPARγ program at its target enhancers.