Abstract Introduction: Sarcomas are cancers that originate from mesenchymal-derived tissues and represent 1% of adult cancers and 15% of pediatric cancers. No effective medical therapy exists for sarcomas, and the 5-year survival of metastatic sarcomas is 16%. Epithelioid hemangioendothelioma (EHE) is a vascular sarcoma where 90% of tumors contain a WWTR1-CAMTA1 gene fusion, whereas the other 10% contain a YAP1-TFE3 gene fusion. TAZ (WWTR1) and YAP are oncogenic transcriptional coactivators and paralogues of one another that are negatively regulated by the Hippo signaling pathway. Constitutive activation of TAZ/YAP is observed in many types of cancer, including sarcomas, however genetic alterations within the pathway are rare. The precise mechanism by which TAZ-CAMTA1 and YAP-TFE3 transform cells is poorly understood. Methods: NIH-3T3 and human sarcoma cell lines were transduced with TAZ-CAMTA1 or YAP-TFE3. Western blot and immunofluorescence were used to evaluate expression and localization of the fusion proteins. In vitro assays were used to assess hallmarks of cancer. Protein-protein interactions were identified through BioID-tandem mass spectrometry. Xenograft experiments in NSG mice with cell lines expressing the fusion proteins were performed to study in vivo hallmarks of cancer. Results: The TAZ-CAMTA1 and YAP-TFE3 fusion proteins contain the N-terminus of TAZ and YAP fused in frame to the C-terminus of CAMTA1 and TFE3, rendering the N-terminus of TAZ and YAP unresponsive to negative regulation by the Hippo pathway. Immunofluorescence revealed that the fusion proteins are localized within the nucleus in both sparse and confluent states, compared to TAZ and YAP which are only localized to the nucleus under sparse conditions. TAZ-CAMTA1 and YAP-TFE3 also promote anchorage-independent growth and increased proliferation. Mass spectrometry revealed differential protein-protein interactions between TAZ-CAMTA1 and/or YAP-TFE3 and the Crumbs complex (MPDZ, PATJ, RASSF8, AMOT, AMOTL1), SWI/SNF complex (ARID1A, ARID1B, SMARCC2, SMARCE1), the Mediator complex (MED12), and chromatin remodeling complexes, as compared to full length TAZ and YAP. Xenografts of transduced NIH-3T3 and SW872 cells showed that the fusion proteins drive tumorigenesis and metastasis in NSG mice. Conclusions: The data indicate that the oncogenic properties of TAZ-CAMTA1 and YAP-TFE3 can be explained by their nuclear enrichment, dysregulation of the upstream Hippo pathway, and interaction with key transcriptional regulatory proteins. Future in vitro and in vivo studies will elucidate additional mechanisms by which these fusion proteins transform cells and promote sarcomagenesis, potentially resulting in new therapeutic targets. Citation Format: Nicole Merritt, Dushyandi Rajendran, Zhen-Yuan Lin, Xiaomeng Zhang, Katrina Mitchell, Colleen Fullenkamp, Anne-Claude Gingras, Kieran Harvey, Munir Tanas. Elucidating the oncogenic mechanism of the TAZ-CAMTA1 and YAP-TFE3 fusion proteins [abstract]. In: Proceedings of the American Association for Cancer Research Annual Meeting 2018; 2018 Apr 14-18; Chicago, IL. Philadelphia (PA): AACR; Cancer Res 2018;78(13 Suppl):Abstract nr 3359.