NAFLD induces the development of advanced liver diseases such as NASH and liver cancer. Therefore, understanding the mechanism of NAFLD development is critical for its prevention and treatment Ablation of PTEN or Hippo pathway components induces liver cancer in a murine model by hyperactive AKT or YAP/TAZ, respectively. Although the regulation of these two pathways occurs in the same hepatocyte, the details of crosstalk between Hippo-YAP/TAZ and PTEN-AKT pathways in liver homeostasis and tumorigenesis still remain unclear. Here, we found that depletion of both PTEN and SAV1 in liver promotes spontaneous NAFLD and liver cancer through hyperactive AKT via YAP/TAZ-mediated up-regulation of IRS2 transcription. Conversely, NAFLD is rescued by both ablation of YAP/TAZ and activation of the Hippo pathway. Furthermore, human HCC patients with NAFLD showed strong correlation between YAP/TAZ and IRS2 or phospho-AKT expression. Finally, the inhibition of AKT by MK-2206 treatment attenuates NAFLD development and tumorigenesis. Our findings indicate that Hippo pathway interacts with AKT signaling during the intervention with IRS2 to prevent NAFLD and liver cancer.