Coordinated Growth and morphogenesis is critical to development of tissues of specific size and shape. The protocadherins Dachsous (Ds) and Fat initiate a signaling pathway that regulates both growth, through regulation of Hippo signaling, and morphogenesis, through regulation of planar cell polarity (PCP). Ds-Fat signaling regulates Hippo signaling and PCP by controlling the membrane localization of the atypical myosin Dachs. Many studies have provided important insights both into how Dachs influences Hippo signaling, and how it influences PCP. In contrast, the mechanism by which Fat signaling actually controls Dachs has remained less well understood. Here we report isolation and characterization the vamana (vam) gene as playing a crucial role in regulating membrane localization of Dachs, and in linking Fat to Dachs. Loss of vam function decreases growth, whereas overexpression of vam promotes growth. These effects are mediated through regulation of the Hippo pathway. Epistasis experiments indicate that vam functions genetically downstream of fat, as vam mutations can suppress lethality, overgrowth and PCP phenotypes elicited by loss of fat. Vam localizes to the apical region of epithelial cells in a polarized manner, co-localizing with Dachs, and is required for proper membrane localization of Dachs. Vam physically interacts with both the carboxy-terminal domain of Dachs, and with a region of the Fat intracellular domain that is essential for controlling Hippo signaling and levels of Dachs. Structure-function analysis of Vam argue that Fat negatively regulates Dachs by displacing Vam from the membrane. Our findings establish Vam as a crucial component of the Dachsous-Fat pathway and identify a mechanism for transmission of Fat signaling.