Taxol (paclitaxel) resistance represents a major challenge in breast cancer treatment. The TAZ (transcriptional co-activator with PDZ-binding motif) oncogene is a major component of the novel Hippo-LATS signaling pathway and a transcriptional coactivator that interacts with and activates multiple transcription factors to regulate various biological processes. Here, we report that elevated levels of TAZ found in human breast cancer cells are responsible for their resistance to Taxol. DNA microarray analysis identified the oncogenes Cyr61 and CTGF as downstream transcriptional targets of TAZ. Short hairpin RNA-mediated knockdown of both Cyr61 and CTGF reversed TAZ-induced Taxol resistance in breast cancer cells. Interaction of TAZ with the TEAD family of transcription factors was essential for TAZ to activate the Cyr61/CTGF promoters and to induce Taxol resistance. Our findings define the TAZ-TEAD-Cyr61/CTGF signaling pathway as an important modifier of the Taxol response in breast cancer cells, as well as highlighting it as a novel therapeutic target to treat drug-resistant breast cancers that arise commonly at advanced stages of disease.