The Hippo/YAP signaling pathway is a crucial regulator of tissue growth, stem cell activity, and tumorigenesis. However, the mechanism by which YAP controls transcription remains to be fully elucidated. Here, we utilize global chromatin occupancy analyses to demonstrate that robust YAP binding is restricted to a relatively small number of distal regulatory elements in the genome. YAP occupancy defines a subset of enhancers and superenhancers with the highest transcriptional outputs. YAP modulates transcription from these elements predominantly by regulating promoter-proximal polymerase II (Pol II) pause release. Mechanistically, YAP interacts and recruits the Mediator complex to enhancers, allowing the recruitment of the CDK9 elongating kinase. Genetic and chemical perturbation experiments demonstrate the requirement for Mediator and CDK9 in YAP-driven phenotypes of overgrowth and tumorigenesis. Our results here uncover the molecular mechanisms employed by YAP to exert its growth and oncogenic functions, and suggest strategies for intervention. Display omitted •YAP/TAZ binding is restricted to a subset of distal regulatory regions in the genome•YAP/TAZ occupancy confers potent transcriptional activity to superenhancer regions•YAP/TAZ regulate transcriptional elongation•YAP recruits the Mediator complex and CDK9-elongating kinase The transcriptional coactivators YAP and TAZ are critical regulators of stem cell activity and tumorigenesis. Galli et al. show that YAP/TAZ binding is restricted to a relatively small number of the most potent enhancers in the genome. They show that YAP/TAZ regulate transcriptional elongation from these elements by recruiting the Mediator complex.