Osteoblast differentiation is a key process for bone homeostasis and repair. Multiple signalling pathways have been associated with osteoblast differentiation, yet much remains unknown on how this process is regulated in vivo Previous studies have proposed that the Hippo pathway transcriptional co-activators YAP and TAZ (also known as YAP1 and WWTR1, respectively) maintain progenitor stemness and inhibit terminal differentiation of osteoblasts, whereas others suggest they potentiate osteoblast differentiation and bone formation. Here, we use zebrafish caudal fin regeneration as a model to clarify how the Hippo pathway regulates de novo bone formation and osteoblast differentiation. We demonstrate that Yap inhibition leads to accumulation of osteoprogenitors and prevents osteoblast differentiation in a cell non-autonomous manner. This effect correlates with a severe impairment of Bmp signalling in osteoblasts, likely by suppressing the expression of the ligand bmp2a in the surrounding mesenchymal cells. Overall, our findings provide a new mechanism of bone formation through the Hippo-Yap pathway, integrating Yap in the signalling cascade that governs osteoprogenitor maintenance and subsequent differentiation during zebrafish caudal fin regeneration.