Fat cadherins form a distinct subfamily of the cadherin gene superfamily, and are featured by their unusually large extracellular domain. In this work, we investigated the function of a mammalian Fat cadherin. Fat1 was localized at filopodial tips, lamellipodial edges, and cell-cell boundaries, overlapping with dynamic actin structures. RNA interference-mediated knockdown of Fat1 resulted in disorganization of cell junction-associated F-actin and other actin fibers/cables, disturbance of cell-cell contacts, and also inhibition of cell polarity formation at wound margins. Furthermore, we identified Ena/vasodilator-stimulated phosphoproteins as a potential downstream effector of Fat1. These results suggest that Fat1 regulates actin cytoskeletal organization at cell peripheries, thereby modulating cell contacts and polarity.