Background & aims: Gain of function (GOF) mutations in the CTNNB1 gene are one of the most frequent genetic events in hepatocellular carcinoma (HCC). T-box transcription factor 3 (TBX3) is a liver-specific target of the Wnt/beta-catenin pathway and thought to be an oncogene mediating activated beta-catenin-driven HCC formation. Methods: We evaluated the expression pattern of TBX3 in human HCC specimens. Tbx3 was conditionally knocked out in murine HCC models by hydrodynamic tail vein injection of Cre together with c-Met and Delta N90-beta-catenin (c-Met/beta-catenin) in Tbx3(flox/flox) mice. TBX3 was overexpressed in human HCC cell lines to investigate the functions of TBX3 in vitro. Results: A bimodal expression pattern of TBX3 in human HCC samples was detected: high expression of TBX3 in GOF CTNNB1 HCC and downregulation of TBX3 in non-CTNNB1 mutant tumors. High expression of TBX3 was associated with increased differentiation and decreased expression signatures of tumor growth. Using Tbx3(flox/flox) mice, we found that ablation of Tbx3 significantly accelerates c-Met/beta-catenin-driven HCC formation. Moreover, Tbx3(-) HCC demonstrated increased YAP/TAZ activity. The accelerated tumor growth induced by loss of TBX3 in c-Met/beta-catenin mouse HCC was successfully prevented by overexpression of LATS2, which inhibited YAP/TAZ activity. In human HCC cell lines, overexpression of TBX3 inhibited HCC cell growth as well as YAP/TAZ activation. A negative correlation between TBX3 and YAP/TAZ target genes was observed in human HCC samples. Mechanistically, phospholipase D1 (PLD1), a known positive regulator of YAP/TAZ, was identified as a novel transcriptional target repressed by TBX3. Conclusion: Our study suggests that TBX3 is induced by GOF CTNNB1 mutants and suppresses HCC growth by inactivating PLD1, thus leading to the inhibition of YAP/TAZ oncogenes. Lay summary: TBX3 is a liver-specific target of the Wnt/beta-catenin pathway and thought to be an oncogene in promoting liver cancer development. Herein, we demonstrate that TBX3 is in fact a tumor suppressor gene that restricts liver tumor growth. Strategies which increase TBX3 expression and/or activities may be effective for HCC treatment. (C) 2021 European Association for the Study of the Liver. Published by Elsevier B.V. All rights reserved.