The large atypical cadherin Fat is a receptor for both Hippo and planar cell polarity (PCP) pathways. Here we investigate the molecular basis for signal transduction downstream of Fat by creating targeted alterations within a genomic construct that contains the entire fat locus, and by monitoring and manipulating the membrane localization of the Fat pathway component Dachs. We establish that the human Fat homolog FAT4 lacks the ability to transduce Hippo signaling in Drosophila, but can transduce Drosophila PCP signaling. Targeted deletion of conserved motifs identifies a four amino acid C-terminal motif that is essential for aspects of Fat-mediated PCP, and other internal motifs that contribute to Fat-Hippo signaling. Fat-Hippo signaling requires the Drosophila Casein kinase 1ε encoded by discs overgrown (Dco), and we characterize candidate Dco phosphorylation sites in the Fat intracellular domain (ICD), the mutation of which impairs Fat-Hippo signaling. Through characterization of Dachs localization and directed membrane targeting of Dachs, we show that localization of Dachs influences both the Hippo and PCP pathways. Our results identify a conservation of Fat-PCP signaling mechanisms, establish distinct functions for different regions of the Fat ICD, support the correlation of Fat ICD phosphorylation with Fat-Hippo signaling, and confirm the importance of Dachs membrane localization to downstream signaling pathways.