Organ development is a complex process governed by the interplay of several signalling pathways that have critical functions in the regulation of cell growth and proliferation. Over the past years, the Hippo pathway has emerged as a key regulator of organ size. Perturbation of this pathway has been shown to play important roles in tumorigenesis. YAP, the main downstream target of the mammalian Hippo pathway, promotes organ growth, yet the underlying molecular mechanism of this regulation remains unclear. Here we provide evidence that YAP activates the mammalian target of rapamycin (mTOR), a major regulator of cell growth. We have identified the tumour suppressor PTEN, an upstream negative regulator of mTOR, as a critical mediator of YAP in mTOR regulation. We demonstrate that YAP downregulates PTEN by inducing miR-29 to inhibit PTEN translation. Last, we show that PI(3)K–mTOR is a pathway modulated by YAP to regulate cell size, tissue growth and hyperplasia. Our studies reveal a functional link between Hippo and PI(3)K–mTOR, providing a molecular basis for the coordination of these two pathways in organ size regulation.