Defective Hippo/YAP signaling in the liver results in tissue overgrowth and development of hepatocellular carcinoma (HCC). Here, we uncover mechanisms of YAP-mediated hepatocyte reprogramming and HCC pathogenesis. YAP functions as a rheostat in maintaining metabolic specialization, differentiation, and quiescence within the hepatocyte compartment. Increased or decreased YAP activity reprograms subsets of hepatocytes to different fates associated with deregulation of the HNF4A, CTNNB1, and E2F transcriptional programs that control hepatocyte quiescence and differentiation. Importantly, treatment with small interfering RNA-lipid nanoparticles (siRNA-LNPs) targeting YAP restores hepatocyte differentiation and causes pronounced tumor regression in a genetically engineered mouse HCC model. Furthermore, YAP targets are enriched in an aggressive human HCC subtype characterized by a proliferative signature and absence of CTNNB1 mutations. Thus, our work reveals Hippo signaling as a key regulator of the positional identity of hepatocytes, supports targeting of YAP using siRNA-LNPs as a paradigm of differentiation-based therapy, and identifies an HCC subtype that is potentially responsive to this approach.