As an important hydrolytic enzyme that yields 2-AG and free fatty acids, diacylglycerol lipase alpha (DAGLA) is involved in exacerbating malignant phenotypes and cancer progression, but the role of the DAGLA/2-AG axis in HCC progression remains unclear. Here, we found that the upregulation of components of the DAGLA/2-AG axis in HCC samples is correlated with tumour stage and patient prognosis. In vitro and in vivo experiments demonstrated that the DAGLA/2-AG axis promoted HCC progression by regulating cell proliferation, invasion and metastasis. Mechanistically, the DAGLA/2AG axis significantly inhibited LATS1 and YAP phosphorylation, promoted YAP nuclear translocation and activity, and ultimately led to TEAD2 upregulation and increased PHLDA2 expression, which could be enhanced by DAGLA/2AG-induced activation of the PI3K/AKT pathway. More importantly, DAGLA induced resistance to lenvatinib therapy during HCC treatment. Our study demonstrates that inhibiting the DAGLA/2-AG axis could be a novel therapeutic strategy to inhibit HCC progression and enhance the therapeutic effects of TKIs, which warrant further clinical studies.