The giant cadherin FAT1 is one of four vertebrate orthologues of the Drosophila tumor suppressor fat. It engages in several functions, including cell polarity and migration, and in Hippo signaling during development. Homozygous deletions in oral cancer suggest that FAT1 may play a tumor suppressor role, although overexpression of FAT1 has been reported in some other cancers. Here we show using Northern blotting that human melanoma cell lines variably but universally express FAT1 and less commonly FAT2, FAT3, and FAT4. Both normal melanocytes and keratinocytes also express comparable FAT1 mRNA relative to melanoma cells. Analysis of the protein processing of FAT1 in keratinocytes revealed that, like Drosophila FAT, human FAT1 is cleaved into a non-covalent heterodimer before achieving cell surface expression. The use of inhibitors also established that such cleavage requires the proprotein convertase furin. However, in melanoma cells, the non-cleaved proform of FAT1 is also expressed at the cell surface together with the furin-cleaved heterodimer. Moreover, furin-independent processing generates a potentially functional proteolytic product in melanoma cells, a persistent 65-kDa membrane-bound cytoplasmic fragment no longer in association with the extracellular fragment. In vitro localization studies of FAT1 showed that melanoma cells display high levels of cytosolic FAT1 protein, whereas keratinocytes, despite comparable FAT1 expression levels, exhibited mainly cell-cell junctional staining. Such differences in protein distribution appear to reconcile with the different protein products generated by dual FAT1 processing. We suggest that the uncleaved FAT1 could promote altered signaling, and the novel products of alternate processing provide a dominant negative function in melanoma.