Myxoid liposarcomas (MLS), malignant tumors of adipocyte origin, are driven by the FUS‐DDIT3 fusion gene encoding an aberrant transcription factor. The mechanisms whereby FUS‐DDIT3 mediates sarcomagenesis are incompletely understood, and strategies to selectively target MLS cells remain elusive. Here we show, using an unbiased functional genomic approach, that FUS‐DDIT3‐expressing mesenchymal stem cells and MLS cell lines are dependent on YAP1, a transcriptional co‐activator and central effector of the Hippo pathway involved in tissue growth and tumorigenesis, and that increased YAP1 activity is a hallmark of human MLS. Mechanistically, FUS‐DDIT3 promotes YAP1 expression, nuclear localization, and transcriptional activity and physically associates with YAP1 in the nucleus of MLS cells. Pharmacologic inhibition of YAP1 activity impairs the growth of MLS cells in vitro and in vivo. These findings identify overactive YAP1 signaling as unifying feature of MLS development that could represent a novel target for therapeutic intervention.