The conserved atypical cadherin Fat regulates planar cell polarity, but the mechanisms by which Fat controls cell shape and tissue organisation are unclear. Emily Marcinkevicius and Jennifer Zallen (p. 433) now show that Fat is required for the planar polarised organisation of denticle precursors, adherens junction proteins and microtubules in the Drosophila embryo epidermis. Adherens junction remodelling and cell shape are disrupted in fat mutants, they report, and in flies carrying mutations in Expanded (a regulator of the Hippo pathway) and in Hippo and Warts (two kinases in the Hippo pathway). Mutations in the Hippo/Warts pathway do not recapitulate the effects of Fat loss on denticle planar organisation, however, and the cell shape and planar polarity defects in fat mutants do not require transcriptional regulation by Yorkie, a target of the Hippo pathway. These results suggest that a common upstream signal provided by Fat regulates junctional and cytoskeletal planar polarity in the Drosophila embryo and that Fat influences tissue organisation by regulating polarised junctional remodelling.