ARHGAP35 encoding p190A RhoGAP is a cancer-associated gene with a mutation spectrum suggestive of a tumor-suppressor function. In this study, we demonstrate that loss of heterozygosity for ARHGAP35 occurs in human tumors. We sought to identify tumor-suppressor capacities for p190A RhoGAP (p190A) and its paralog p190B in epithelial cells. We reveal an essential role for p190A and p190B to promote contact inhibition of cell proliferation (CIP), a function that relies on RhoGAP activity. Unbiased mRNA sequencing analyses establish that p190A and p190B modulate expression of genes associated with the Hippo pathway. Accordingly, we determine that p190A and p190B induce CIP by repressing YAP–TEAD-regulated gene transcription through activation of LATS kinases and inhibition of the Rho–ROCK pathway. Finally, we demonstrate that loss of a single p190 paralog is sufficient to elicit nuclear translocation of YAP and perturb CIP in epithelial cells cultured in Matrigel. Collectively, our data reveal a novel mechanism consistent with a tumor-suppressor function for ARHGAP35.