Planar cell polarity is an important characteristic of many epithelia. In the Drosophila wing, eye and abdomen, establishment of planar cell polarity requires the core planar cell polarity genes and two cadherins, Fat and Dachsous. Drosophila Fat2 is a cadherin related to Fat; however, its role during planar cell polarity has not been studied. Here, we have generated mutations in fat2 and show that Fat2 is required for the planar polarity of actin filament orientation at the basal side of ovarian follicle cells. Defects in actin filament orientation correlate with a failure of egg chambers to elongate during oogenesis. Using a functional fosmid-based fat2-GFP transgene, we show that the distribution of Fat2 protein in follicle cells is planar polarized and that Fat2 localizes where basal actin filaments terminate. Mosaic analysis demonstrates that Fat2 acts non-autonomously in follicle cells, indicating that Fat2 is required for the transmission of polarity information. Our results suggest a principal role for Fat-like cadherins during the establishment of planar cell polarity.