Cardiac fibroblasts (CFs) respond to injury by transitioning through multiple cell states, including resting CFs, activated CFs, and myofibroblasts. We report here that Hippo signaling cell-autonomously regulates CF fate transitions and proliferation, and non-cell-autonomously regulates both myeloid and CF activation in the heart. Conditional deletion of Hippo pathway kinases, Lats1 and Lats2, in uninjured CFs initiated a self-perpetuating fibrotic response in the adult heart that was exacerbated by myocardial infarction (MI). Single cell transcriptomics showed that uninjured Lats1/2 mutant CFs spontaneously transitioned to a myofibroblast cell state. Through gene regulatory network reconstruction, we found that Hippo-deficient myofibroblasts deployed a network of transcriptional regulators of endoplasmic reticulum (ER) stress, and the unfolded protein response (UPR) consistent with elevated secretory activity. We observed an expansion of myeloid cell heterogeneity in uninjured Lats1/2 CKO hearts with similarity to cells recovered from control hearts post-MI. Integrated genome-wide analysis of Yap chromatin occupancy revealed that Yap directly activates myofibroblast cell identity genes, the proto-oncogene Myc, and an array of genes encoding pro-inflammatory factors through enhancer–promoter looping. Our data indicate that Lats1/2 maintain the resting CF cell state through restricting the Yap-induced injury response.