Collective migration of cells in an epithelial sheet underlies tissue remodeling events associated with morphogenesis, wound repair, and the metastatic cascade. Similar to individually migrating cells, each epithelial cell forms actin-based protrusions at its leading edge that form new adhesions to the extracellular matrix (ECM). Each cell also releases cell-ECM adhesions at its rear to allow the trailing edge to retract and cell body to advance. These migratory behaviors must be coordinated with outstanding precision to allow sheet migration to occur. Each cell’s protrusions extend beneath the trailing edges of the cells in front, similar to overlapping shingles on a roof. Thus trailing edge retraction in the leading cell must be coordinated with protrusion formation in the trailing cell so that the two cells don’t compete to adhere to the same region of ECM. Studying the migration of the follicular epithelium, we find that the cadherin Fat2 and the receptor phosphatase Lar form the core of a planar signaling system that coordinates leading edge protrusion and trailing edge retraction between neighboring cells. Fat2/Lar signaling is similar to the Frizzled/VanGogh and Fat/Dachsous planar cell polarity (PCP) signaling that is used to organize many epithelial tissues, in that Fat2 and Lar localize to opposite sides of each cell and mediate communication across cell-cell boundaries. However, whereas the PCP systems operate near the apical surface to transmit long-range information across the tissue, the Fat2/Lar system operates near the basal surface to transmit short-range information between adjacent cells. Previously, Fat2 was shown to localize to the trailing edge of each migrating cell. Our analysis in mosaic epithelia reveals that Fat2 signals from the trailing edge to non-cell-autonomously induce leading edge protrusions in the cell directly behind. Conversely, we find that Lar localizes to the leading edge, and is cell-autonomously required for protrusions. We also observe a trailing edge retraction defect in both Lar and fat2 mosaics. In this process, however, Fat2 plays a cell-autonomous role, while Lar plays a non-cell-autonomous signaling role. Further, we provide evidence suggesting that Fat2 and Lar participate in a protein complex that spans cell-cell boundaries. Together our data suggest that bidirectional signaling between Fat2 and Lar across cell-cell interfaces coordinates leading and trailing edge behaviors between neighboring cells to promote collective cell migration.