Many signaling pathways have been implicated in development and homeostasis of an organism. Among such signaling pathways, the Hippo pathway regulates the activity of the oncoprotein YAP. YAP is primarily regulated through phosphorylation by LATS kinases. Although variety of upstream stimuli and signaling axes has been found to regulate LATS kinases and YAP activity, the existence and function of negative feedback has remained uncertain, despite some hints provided by past research. In this study, we found that increased YAP activity directly induces LATS2 transcription through the TEAD transcription factor to form a negative feedback loop. Ablation of the negative feedback on Yap activity by deletion of Lats2 in a liver specific Sav1 knock-out mouse model further activates Yap and results in accelerated tumorigenesis. Notably, this negative feedback loop is evolutionarily conserved, as Drosophila YAP orholog Yorkie induces transcription of Warts (LATS2 ortholog) through Scalloped (TEAD ortholog). Collectively, our findings demonstrate the existence and function of a negative feedback mechanism in the Hippo pathway.