Formation of the coronary vasculature is a complex and precisely coordinated morphogenetic process that begins with the formation of epicardium. The epicardium gives rise to many components of the coronary vasculature, including fibroblasts, smooth muscle cells, and endothelium. Hippo signaling components have been implicated in cardiac development and regeneration. However, a role of Hippo signaling in the epicardium has not been explored. Employing a combination of genetic and pharmacological approaches, we demonstrate that inhibition of Hippo signaling mediators Yap and Taz leads to impaired epicardial epithelial-to-mesenchymal transition (EMT) and a reduction in epicardial cell proliferation and differentiation into coronary endothelial cells. We provide evidence that Yap and Taz control epicardial cell behavior, in part by regulating Tbx18 and Wt1 expression. Our findings show a role for Hippo signaling in epicardial cell proliferation, EMT, and cell fate specification during cardiac organogenesis.