Recent molecular classification of glioblastoma (GBM) has shown that patients with a mesenchymal (MES) gene expression signature exhibit poor overall survival and treatment resistance. Using regulatory network analysis of available expression microarray data sets of GBM, including The Cancer Genome Atlas (TCGA), we identified the transcriptional coactivator with PDZ-binding motif (TAZ), to be highly associated with the MES network. TAZ expression was lower in proneural (PN) GBMs and lower-grade gliomas, which correlated with CpG island hypermethylation of the TAZ promoter compared with MES GBMs. Silencing of TAZ in MES glioma stem cells (GSCs) decreased expression of MES markers, invasion, self-renewal, and tumor formation. Conversely, overexpression of TAZ in PN GSCs as well as murine neural stem cells (NSCs) induced MES marker expression and aberrant osteoblastic and chondrocytic differentiation in a TEAD-dependent fashion. Using chromatin immunoprecipitation (ChIP), we show that TAZ is directly recruited to a majority of MES gene promoters in a complex with TEAD2. The coexpression of TAZ, but not a mutated form of TAZ that lacks TEAD binding, with platelet-derived growth factor-B (PDGF-B) resulted in high-grade tumors with MES features in a murine model of glioma. Our studies uncover a direct role for TAZ and TEAD in driving the MES differentiation of malignant glioma.