The factors regulating cellular identity are critical for understanding the transition from health to disease and responses to therapies. Recent literature suggests that autophagy compromise may cause opposite effects in different contexts by either activating or inhibiting YAP/TAZ co-transcriptional regulators of the Hippo pathway via unrelated mechanisms. Here, we report that autophagy perturbation in different cell types can have opposite responses in growth-promoting oncogenic YAP/TAZ transcriptional signalling. These apparently contradictory responses can be resolved by a feedback loop where autophagy negatively regulates the levels of α-catenins LC3-interacting proteins, which inhibit YAP/TAZ, which, in turn, positively regulate autophagy. High basal levels of α-catenins enable autophagy induction to positively regulate YAP/TAZ, while low α-catenins cause YAP/TAZ activation upon autophagy inhibition. These data reveal how feedback loops enable post-transcriptional determination of cell identity and how levels of a single intermediary protein can dictate the direction of response to external or internal perturbations.