Cells perceive their microenvironment through chemical and physical cues. However, how mechanical signals are interpreted during embryonic tissue deformation resulting in specific cell behaviors is largely unknown. The Yap/Taz family of transcriptional co-activators has emerged as an important regulator of tissue growth and regeneration, responding to physical cues from the extracellular matrix, cell shape changes and actomyosin cytoskeleton. In this study, we demonstrated the role of Yap/Taz-TEAD activity as a sensor of mechanical signals in the regulation of the progenitor behavior of boundary cells during zebrafish hindbrain compartmentalization. Monitoring of in vivo Yap/Taz-activity during hindbrain segmentation indicated that boundary cells responded to mechanical cues in a cell-autonomous manner through Yap/Taz-TEAD activity. Cell-lineage analysis revealed that Yap/Taz-TEAD boundary cells decreased their proliferative activity when Yap/Taz-TEAD activity ceased, which preceded changes in their cell fate from proliferating progenitors to differentiated neurons. Functional experiments demonstrated the pivotal role of Yap/Taz-TEAD signaling in maintaining progenitor features in the hindbrain boundary cell population.