The role of the Hippo signaling pathway in cranial neural crest (CNC) development is poorly understood. We used the Wnt1(Cre) and Wnt1(Cre2SOR) drivers to conditionally ablate both Yap and Taz in the CNC of mice. When using either Cre driver, Yap and Taz deficiency in the CNC resulted in enlarged, hemorrhaging branchial arch blood vessels and hydrocephalus. However, Wnt1(Cre2SOR) embryos had an open cranial neural tube phenotype that was not evident in Wnt1(Cre) embryos. In O9-1 CNC cells, the loss of Yap and Taz impaired smooth muscle cell differentiation. RNA-sequencing data indicated that Yap and Taz regulate genes encoding Fox transcription factors, specifically Foxc1. Proliferation was reduced in the branchial arch mesenchyme of Yap and Taz CNC conditional knockout (CKO) embryos. Moreover, Yap and Taz CKO embryos had cerebellar aplasia similar to Dandy Walker spectrum malformations observed in human patients and mouse embryos with mutations in Foxc1. In embryos and O9-1 cells deficient for Yap and Taz, Foxc1 expression was significantly reduced. Analysis of Foxc1 regulatory regions revealed a conserved recognition element for the Yap and Taz DNA binding co-factor Tead. ChIP-pcr experiments further supported the conclusion that Foxc1 is directly regulated by the Yap/Tead complex. Our findings uncover important roles for Yap and Taz in CNC diversification and development.