ARTICLE ABSTRACTPurpose: Aggressive pancreatic cancer is commonly associated with a dense desmoplastic stroma, which forms a protective niche for cancer cells. The objective of the study was to determine the functions of tissue transglutaminase (TG2), a Ca2+-dependent enzyme that cross-links proteins through transamidation and is abundantly expressed by pancreatic cancer cells in the pancreatic stroma.Experimental Design: Orthotopic pancreatic xenografts and coculture systems tested the mechanisms by which the enzyme modulates tumor–stroma interactions.Results: We show that TG2 secreted by cancer cells effectively molds the stroma by cross-linking collagen, which, in turn, activates fibroblasts and stimulates their proliferation. The stiff fibrotic stromal reaction conveys mechanical cues to cancer cells, leading to activation of the YAP/TAZ transcription factors, promoting cell proliferation and tumor growth. Stable knockdown of TG2 in pancreatic cancer cells leads to decreased size of pancreatic xenografts.Conclusions: Taken together, our results demonstrate that TG2 secreted in the tumor microenvironment orchestrates the cross-talk between cancer cells and stroma fundamentally affecting tumor growth. Our study supports TG2 inhibition in the pancreatic stroma as a novel strategy to block pancreatic cancer progression. Clin Cancer Res; 21(19); 4482–93. ©2015 AACR.