Myoblast fusion is a key process in multinucleated muscle formation. Prior to fusion, myoblasts recognize and adhere to each other with the aid of cell-adhesion proteins integrated into the membrane. Their intracellular domains participate in signal transduction by binding to cytoplasmic proteins. Here we identified the calcium-dependent cell-adhesion protein N-cadherin as the binding partner of the guanine-nucleotide exchange factor Schizo/Loner in Drosophila melanogaster. N-cadherin was expressed in founder cells and fusion-competent myoblasts of Drosophila during the first fusion phase. Our genetic analyses demonstrated that the myoblast fusion defect of schizo/loner mutants is rescued in part by the loss-of-function mutation of N-cadherin, which suggests that Schizo/Loner is a negative regulator of N-cadherin. Based on our findings, we propose a model where N-cadherin must be removed from the myoblast membrane to induce a protein-free zone at the cell-cell contact point to permit fusion.