Targeting TEAD autopalmitoylation has been proposed as a therapeutic approach for YAP-dependent cancers. Here we show that TEAD palmitoylation inhibitor MGH-CP1 and analogues block cancer cell "stemness", organ overgrowth and tumor initiation in vitro and in vivo. MGH-CP1 sensitivity correlates significantly with YAP-dependency in a large panel of cancer cell lines. However, TEAD inhibition or YAP/TAZ knockdown leads to transient inhibition of cell cycle progression without inducing cell death, undermining their potential therapeutic utilities. We further reveal that TEAD inhibition or YAP/TAZ silencing leads to VGLL3-mediated transcriptional activation of SOX4/PI3K/AKT signaling axis, which contributes to cancer cell survival and confers therapeutic resistance to TEAD inhibitors. Consistently, combination of TEAD and AKT inhibitors exhibits strong synergy in inducing cancer cell death. Our work characterizes the therapeutic opportunities and limitations of TEAD palmitoylation inhibitors in cancers, and uncovers an intrinsic molecular mechanism, which confers potential therapeutic resistance.