Yes-associated protein (YAP) and transcriptional coactivator with PDZ-binding motif (TAZ) are key downstream effectors of the Hippo pathway that regulate organ size, tissue homeostasis, and cancer development. YAP/TAZ play crucial regulatory roles in organ growth, cell proliferation, cell renewal, and regeneration. Mechanistically, YAP/TAZ influence the occurrence and progression of liver regeneration (LR) through various signaling pathways, including Notch, Wnt/β-catenin, TGF-β/Smad. While the activation of YAP/TAZ can promote the regeneration of damaged liver tissue, their mechanisms of action may differ under various LR conditions. Furthermore, excessive activation of YAP/TAZ may also lead to severe liver damage, manifesting as alcoholic hepatitis, liver fibrosis, and even liver cancer. Here, we review the role and mechanisms of YAP/TAZ in LR and liver disease, highlighting the potential for advancements in clinical diagnosis and treatment targeting YAP/TAZ in these contexts.