The Runt box domain DNA-binding transcription factors (RUNX) play key roles in hematopoietic, bone, and gastric development. These factors regulate angiogenesis and tumorigenic events, functioning as either activators or repressors of target genes. Although RUNX2 is an essential bone maturation factor, it has also been found to promote transformation in vivo and cell proliferation in vitro, perhaps by associating with specific coactivators or corepressors. Adenoviral-mediated overexpression of dominant negative RUNX2 or specific reduction of RUNX2 with RNA-interference inhibits cell proliferation. To determine whether RUNX2 also plays a role in cell transformation, RUNX2 interactions with the coactivator Yes-associated protein (YAP65) were examined. RUNX2 associated with YAP65 via a proline-rich segment in the C-terminal domain (PPPY) and coexpression of RUNX2 and YAP65 significantly increased foci formation and anchorage-independent growth relative to each factor alone. However, in contrast to wild-type RUNX2, a mutant RUNX2(P409A), which does not bind YAP65, did not cooperate with YAP65 to promote anchorage-independent growth. RUNX2 is a strong repressor of the cyclin-dependent kinase inhibitor p21(CIP1), which is known to mediate cell transformation. Overexpression of YAP65 prevented RUNX2-dependent downregulation of p21(CIP1) protein expression while promoting cell transformation. The RUNX2(P409A) mutant retained the ability to bind DNA and repress the p21(CIP1) promoter as shown by DNA precipitation and luciferase-reporter assays, respectively, but was not able to relieve repression of the p21(CIP1) promoter. Therefore, these results reveal a novel function of the RUNX2 and YAP65 interaction in oncogenic transformation that may be mediated by modulation of p21(CIP1) protein expression.