The protocadherins Fat (Ft) and Dachsous (Ds) are required for several processes in the development of Drosophila, including controlling growth of imaginal discs, planar cell polarity (PCP) and the proximodistal patterning of appendages. Ft and Ds bind in a preferentially heterophilic fashion, and Ds is expressed in distinct patterns along the axes of polarity. It has thus been suggested that Ft and Ds serve not as adhesion molecules, but as receptor and ligand in a poorly understood signaling pathway. To test this hypothesis, we performed a structure-function analysis of Ft and Ds, separating their adhesive and signaling functions. We found that the extracellular domain of Ft is not required for its activity in growth, PCP and proximodistal patterning. Thus, ligand binding is not necessary for Ft activity. By contrast, the extracellular domain of Ds is necessary and sufficient to mediate its effects on PCP, consistent with the model that Ds acts as a ligand during PCP. However, we also provide evidence that Ds can regulate growth independently of Ft, and that the intracellular domain of Ds can affect proximodistal patterning, both suggestive of functions independent of binding Ft. Finally, we show that ft mutants or a dominant-negative Ft construct can affect disc growth without changes in the expression of wingless and Wingless target genes.