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Propagation of human naïve pluripotent stem cells (nPSCs) relies on the inhibition of MEK/ERK signalling. However, MEK/ERK inhibition also promotes differentiation into trophectoderm (TE). Therefore, robust self-renewal requires suppression of TE fate. Tankyrase inhibition using XAV939 has been shown to stabilise human nPSCs and is implicated in TE suppression. Here, we dissect the mechanism of this effect. Tankyrase inhibition is known to block canonical Wnt/β-catenin signalling. However, we show that nPSCs depleted of β-catenin remain dependent on XAV939. Rather than inhibiting Wnt, we found that XAV939 prevents TE induction by reducing activation of YAP, a co-factor of TE-inducing TEAD transcription factors. Tankyrase inhibition stabilises angiomotin, which limits nuclear accumulation of YAP. Upon deletion of angiomotin-family members AMOT and AMOTL2, nuclear YAP increases and XAV939 fails to prevent TE induction. Expression of constitutively active YAP similarly precipitates TE differentiation. Conversely, nPSCs lacking YAP1 or its paralog TAZ (WWTR1) resist TE differentiation and self-renewal efficiently without XAV939. These findings explain the distinct requirement for tankyrase inhibition in human but not in mouse nPSCs and highlight the pivotal role of YAP activity in human naïve pluripotency and TE differentiation. [ABSTRACT FROM AUTHOR]