Transcriptional coactivators of YAP/TAZ play key roles in cancers through transcriptional outputs. However, the mechanisms of their transactivation remain unclear, and effective and safe targeting solutions are lacking. Here, we discovered that YAP/ TAZ possess a hydrophobic transactivation domain (TAD). Knockout of TADs prevents tumor establishment due to growth defects and enhanced immune attack. TADs facilitate preinitiation complex (PIC) assembly by promoting TFIID recruitment in a TAF4-dependent manner and enhance RNA polymerase II (Pol II) elongation through MED15-dependent mediator complex recruitment. The bindings of TAD to the surface hydrophobic groove of MED15 induce its folding of the helix and hydrophobic interactions of TAD-MED15 boosts YAP-MED15 co-condensations thereby enhancing transcriptional hub formation and the expression of an oncogenic and immune suppressive transcriptional program. Synthesized small peptide TJ-M11 selectively disrupts the interactions of TADs with MED15 and TAF4, thereby suppressing tumor growth and sensitizing immunotherapy. This study indicates TADs of YAP/TAZ exhibit dual functions in PIC assembly and Pol II elongation, relying on hydrophobic interactions.