Adult tissue stem cells are thought to be responsible for maintaining tissue homeostasis and regeneration following injury in somatic tissues. Thus, basic understating of the biology of tissue-specific stem cells and the signaling pathways the control their behavior is critical for their potential application in the treatment of disease. The Drosophila Hippo pathway regulates organ size through regulation of the transcriptional activator Yorkie. We have recently demonstrated that Hippo signaling is active in mammalian tissues and that it can also regulate organ size. Particularly, in the skin, the transcriptional effector of the Hippo pathway, YAP1, is essential for proper epidermal tissue expansion during development. Over-activation of YAP1 leads to progenitor expansion and tumor development. The specific hypothesis here is that the Hippo pathway acts on stem cell compartments and expands undifferentiated progenitor cells when needed during tissue growth, and during tumorigenesis. In this proposal, we aim to gain novel mechanistic insight into the role of Hippo signaling in skin biology. Our proposal makes use of unique genetic tools that our laboratory has generated. In Aim 1, we propose to utilize a Hippo-signaling sensor to characterize the cells in the skin that have highest levels Yap activity. Additionally, we will fully characterize the developmental abnormalities caused by the loss of YAP and its homologue TAZ in the skin. In Aim 2, we will identify and characterize the critical mediators of YAP activity using genome-wide binding analysis in primary epidermal progenitors. Finally in Aim 3, we will explore a previously under-appreciated relationship between Hippo and Hedgehog signaling during epidermal basal cell carcinoma growth. Our studies could lead to a better understanding of epidermal stem cell biology, and new models and strategies for expansion, characterization and manipulation of these critical cells for therapeutic purposes.