Abstract TAZ functions as a transcriptional co-activator critical for tissue development, mesenchymal stem cell differentiation, and embryonic stem cell renewal. Recently, TAZ has been identified as a major downstream component of the novel Hippo-LATS tumor suppressor pathway, where TAZ over-expression in immortalized mammary epithelial cells, MCF10A, leads to enhanced cell proliferation and migration, transformation, EMT, and resistance to the chemotherapeutic paclitaxel. However, the molecular mechanisms underlying these TAZ-induced phenotypes are largely unknown. In this study, we aimed to identify downstream targets responsible for TAZ-induced phenotypes. Through screening a 44K human genome microarray we have identified many potential targets, one of which is bone morphogenetic protein 4 (BMP4), a cytokine that regulates important processes such as cell proliferation, migration, and EMT. By qRT-PCR, western blotting, and an ELISA assay we verified that BMP4 is upregulated at the mRNA, protein, and secreted levels, respectively, in TAZ overexpressing MCF10A cells (MCF10A-TAZ) compared to control cells (MCF10A-WPI). To investigate whether BMP4 is a direct transcriptional target of TAZ, we used a dual luciferase assay to measure BMP4 promoter activity. When co-transfected with TAZ and TEAD4, a transcription factor mediating TAZ transactivation, BMP4 promoter activity was significantly increased. This TAZ/TEAD interaction is critical for BMP4 transcriptional activation as interaction mutants of TAZ and TEAD4 (TAZα72 and TEAD4-Y429H) both fail to activate BMP4 promotor activity. Significantly, we have identified two TEAD Response Elements (TRE) located in the BMP4 promoter where mutation of TRE1 alone completely abolished activation of BMP4 promoter activity by TAZ/TEAD4 and mutation of TRE2 had no effect. This suggests that TRE1 is responsible for TAZ/TEAD activation of BMP4. Through microarray analysis, we have identified many secreted cytokines leading us to suspect that they may promote EMT. Strikingly, MCF10A cells continuously treated with conditioned media from MCF10A-TAZ or exogenous BMP4 induced an obvious EMT phenotype, suggesting that BMP4 may be responsible for TAZ-induced EMT. Moreover, phosphorylation of Smad1,5 (pSmad1,5), two major mediators of BMP4 function, was also significantly increased in MCF10A-TAZ, but was completely abolished when MCF10A-TAZ cells were treated with Noggin, a BMP4 specific inhibitor, demonstrating that activation of Smad is specifically due to BMP4. Our results provide convincing evidence that BMP4 is a novel transcriptional target of TAZ, which may mediate the TAZ-induced EMT phenotype and thereby identify a novel TAZ/TEAD/BMP4/Smad1,5 signaling axis. Further functional characterization of this pathway will greatly facilitate our understanding of the roles of TAZ in the metastatic progression of breast cancer. Citation Format: {Authors}. {Abstract title} [abstract]. In: Proceedings of the 103rd Annual Meeting of the American Association for Cancer Research; 2012 Mar 31-Apr 4; Chicago, IL. Philadelphia (PA): AACR; Cancer Res 2012;72(8 Suppl):Abstract nr 3247. doi:1538-7445.AM2012-3247