Four members of the TEAD/TEF family of transcription factors are expressed widely in mouse embryos and adult tissues. Although in vitro studies have suggested various roles for TEAD proteins, their in vivo functions remain poorly understood. Here we examined the role of Tead genes by generating mouse mutants for Tead1 and Tead2. Tead2^−/− mice appeared normal, but Tead1^−/−; Tead2^−/− embryos died at embryonic day 9.5 (E9.5) with severe growth defects and morphological abnormalities. At E8.5, Tead1^−/−; Tead2^−/− embryos were already small and lacked characteristic structures such as a closed neural tube, a notochord, and somites. Despite these overt abnormalities, differentiation and patterning of the neural plate and endoderm were relatively normal. In contrast, the paraxial mesoderm and lateral plate mesoderm were displaced laterally, and a differentiated notochord was not maintained. These abnormalities and defects in yolk sac vasculature organization resemble those of mutants for Yap, which encodes a coactivator of TEAD proteins. Moreover, we demonstrated genetic interactions between Tead1 and Tead2 and Yap. Finally, Tead1^−/−; Tead2^−/− embryos showed reduced cell proliferation and increased apoptosis. These results suggest that Tead1 and Tead2 are functionally redundant, use YAP as a major coactivator, and support notochord maintenance as well as cell proliferation and survival in mouse development.