Project Summary The giant Drosophila protocadherins Fat and Dachsous (Ds) form a heterophilic, bidirectional signaling pair that regulates proliferation via the growth-inhibiting Hippo pathway, and planar cell polarity (PCP) both through and independently of the “core” PCP pathway. These functions are shared by their mammalian homologs, and human mutations in Fat and Ds cause the neurological and multisystem defects of Hennekam and Van Maldergem syndromes. Despite its importance, only a little is known about how binding between Fat and Ds change cell behavior, and thus how it regulates development and pathology. Fat, Ds and the effectors of the Hippo and PCP pathways are concentrated in the subapical domain of epithelial cells, and the intracellular domain (ICD) of Fat has strong effects on the subapical levels of two critical proteins. The first is the scaffolding myosin Dachs, which binds and inhibits Warts (Lats1/2), the final effector kinase in the Hippo pathway, and which regulates Sple in the core PCP pathway. The second is the FERM scaffolding protein Expanded, which stimulates Warts activity. However, the physical and biochemical links between the Fat ICD, Dachs and Expanded have never been established. Using a combination of protein-binding screens, biochemistry and genetics, we have for the first time filled that physical gap, and in a way that provides a strong working model for the biochemistry of Fat signal transduction. The Fat ICD binds two proteins, the DHHC palmitoyltransferase Approximated (App), and the newly discovered SH3 adaptor protein Dlish. Our data indicates that Fat inhibits the palmitoylation of Dlish through App and thereby its affinity for and accumulation near the subapical cell membrane. In fat mutants, membrane-associated Dlish increases, directly binding Dachs and recruiting it to the subapical cell cortex, where Dachs inhibits Warts. Dlish also directly binds Expanded and reduces its levels and Warts-stimulating activity, likely through regulated ubiquitination. We propose experiments designed to rigorously test and extend our understanding of this important and unusual signaling pathway, moving from in vitro to in vivo assays and analyses, investigating parallel and alternative pathways, and identifying new pathway components.