The Hippo signaling pathway regulates organ size and plays critical roles in maintaining tissue growth, homeostasis, and regeneration. Dysregulated in a wide spectrum of cancers, in mammals, this pathway is regulated by two key effectors, YAP and TAZ, that may functionally overlap. We found that TAZ promoted liver inflammation and tumor development. The expression of TAZ, but not YAP, in human liver tumors positively correlated with the expression of proinflammatory cytokines. Hyperactivated TAZ induced substantial myeloid cell infiltration into the liver and the secretion of proinflammatory cytokines through a TEAD-dependent mechanism. Furthermore, tumors with hyperactivated YAP and TAZ had distinct transcriptional signatures, which included the increased expression of inflammatory cytokines in TAZ-driven tumors. Our study elucidated a previously uncharacterized link between TAZ activity and inflammatory responses that influence tumor development in the liver.