Interplay between apicobasal cell polarity modules and the cytoskeleton is critical for differentiation and integrity of epithelia. However, this coordination is poorly understood at the level of gene regulation by transcription factors. Here, we establish the Drosophila activating transcription factor 3 (atf3) as a cell polarity response gene acting downstream of the membrane-associated Scribble polarity complex. Loss of the tumor suppressors Scribble or Dlg1 induces atf3 expression via aPKC but independent of Jun-N-terminal kinase (JNK) signaling. Strikingly, removal of Atf3 from Dlg1 deficient cells restores polarized cytoarchitecture, levels and distribution of endosomal trafficking machinery, and differentiation. Conversely, excess Atf3 alters microtubule network, vesicular trafficking and the partition of polarity proteins along the apicobasal axis. Genomic and genetic approaches implicate Atf3 as a regulator of cytoskeleton organization and function, and identify Lamin C as one of its bona fide target genes. By affecting structural features and cell morphology, Atf3 functions in a manner distinct from other transcription factors operating downstream of disrupted cell polarity.