YES-associated protein (YAP) is a central transcription coactivator that functions as an oncogene in a number of experimental systems. However, under DNA damage, YAP activates pro-apoptotic genes in conjunction with p73. This program switching is mediated by c-Abl (Abelson murine leukemia viral oncogene) via phosphorylation of YAP at the Y357 residue (pY357). YAP as an oncogene coactivates the TEAD (transcriptional enhancer activator domain) family transcription factors. Here we asked whether c-Abl regulates the YAP-TEAD functional module. We found that DNA damage, through c-Abl activation, specifically depressed YAP-TEAD-induced transcription. Remarkably, c-Abl counteracts YAP-induced transformation by interfering with the YAP-TEAD transcriptional program. c-Abl induced TEAD1 phosphorylation, but the YAP-TEAD complex remained unaffected. In contrast, TEAD coactivation was compromised by phosphomimetic YAP Y357E mutation but not Y357F, as demonstrated at the level of reporter genes and endogenous TEAD target genes. Furthermore, YAP Y357E also severely compromised the role of YAP in cell transformation, migration, anchorage-independent growth, and epithelial-to-mesenchymal transition (EMT) in human mammary MCF10A cells. These results suggest that YAP pY357 lost TEAD transcription activation function. Our results demonstrate that YAP pY357 inactivates YAP oncogenic function and establish a role for YAP Y357 phosphorylation in cell-fate decision.