Pancreatic ductal adenocarcinoma (PDAC) is characterized by a fibrotic and inflammatory microenvironment that is formed primarily by activated, myofibroblast-like, stellate cells. Although the stellate cells are thought to contribute to tumorigenesis, metastasis and drug resistance of PDAC, the signaling events involved in activation of the stellate cells are not well defined. Functioning as transcription co-factors, Yes-associated protein (YAP) and its homolog transcriptional co-activator with PDZ-binding motif (TAZ) modulate the expression of genes involved in various aspects of cellular functions, such as proliferation and mobility. Using human tissues we show that YAP and TAZ expression is restricted to the centroacinar and ductal cells of normal pancreas, but is elevated in cancer cells. In particular, YAP and TAZ are expressed at high levels in the activated stellate cells of both chronic pancreatitis and PDAC patients as well as in the islets of Langerhans in chronic pancreatitis tissues. Of note, YAP is up regulated in both acinar and ductal cells following induction of acute and chronic pancreatitis in mice. These findings indicate that YAP and TAZ may play a critical role in modulating pancreatic tissue regeneration, neoplastic transformation, and stellate cell functions in both PDAC and pancreatitis.