YAP (Yes-associated protein) and its paralog TAZ (transcriptional co-activator with PDZ-binding motif) are the main downstream effectors of the Hippo signaling pathway. This pathway is an evolutionally conserved signal cascade, which plays pivotal roles in organ size control and tumorigenesis from Drosophila to mammals. Functionally, when the Hippo pathway is activated, YAP and TAZ will be sequestered in the cytoplasm and degraded. Conversely, when the Hippo pathway is deactivated, YAP and TAZ will translocate into nucleus and promote transcription of downstream genes by forming complexes with transcription factors, such as transcriptional enhancer factors (TEF; also referred to as TEAD), runt-domain transcription factors (Runx) and others. Most of these transcription factors belong to growth promoting or apoptosis-inhibition genes. It has been reported that the deactivation of the Hippo pathway, as well as up-regulation of YAP and TAZ was observed in many human cancers with a high frequency, which suggests that the Hippo pathway may be a potent target for developing anticancer drugs. In this review, we provide an overview of the Hippo pathway and summarize recent advances with respect to the role of YAP and TAZ in Hippo signaling pathway and cancer development. Furthermore, we describe the opportunities and challenges for exploit YAP and TAZ as potential therapeutic targets in cancer.