5'-Nucleotidase Domain Containing 2 (NT5DC2) is a novel oncoprotein, the regulatory effects of which have not been well characterized. This study aimed to investigate the expression profile and functional regulation of NT5DC2 and its potential interplay with TEAD4 in leiomyosarcoma (LMS). Bioinformatic analysis was conducted using data from The Cancer Genome Atlas (TCGA) and Genotype-Tissue Expression (GTEx) program. LMS cell lines SK-LMS-1 and SK-UT-1 were used for both in vitro and in vivo analysis. Results showed that NT5DC2 is aberrantly upregulated in LMS. Its overexpression was associated with unfavourable survival. Deletion of NT5DC2 significantly reduced the expression of cyclin B1, cyclin A2, cyclin E1 and CDK1 and increased G1 phase arrest in LMS cell lines, and suppressed their proliferation both in vitro and in vivo. NT5DC2 interacted with unpalmitoylated TEAD4, and this association reduced TEAD4 degradation via the ubiquitin-proteasome pathway. TRIM27 is a novel E3 ubiquitin ligase that induces K27/48-linked ubiquitination of unpalmitoylated TEAD4 at Lys278. TEAD4 inhibition significantly suppressed LMS cell growth both in vitro and in vivo. Dual-luciferase assay demonstrated that TEAD4 could bind to the NT5DC2 promoter and activate its transcription. Based on these findings, we infer that the NT5DC2-TEAD4 positive feedback loop plays an important role in LMS development and might serve as a potential therapeutic target. © 2021 The Authors. Journal of Cellular and Molecular Medicine published by Foundation for Cellular and Molecular Medicine and John Wiley & Sons Ltd.