Cadherins are Ca2+-dependent cell adhesion molecules that are important regulators of cell and tissue architecture. I analyzed the expression and regulation of the Drosophila cadherin Dcad99C. In the wing imaginal disc, Dcad99C is highly expressed in a stripe of anterior cells along the anterior/posterior compartment boundary. Genetic experiments showed that Dcad99C is upregulated by the Hedgehog signaling pathway through the transcriptional activator Ci Act, which initially suggested that Dcad99C might be mediating cell sorting at the compartment boundary. However, Dcad99C overexpressing clones respect the compartment boundary and do not sort out from wild-type wing disc cells, indicating that Dcad99C is not sufficient to induce cell sorting. Subcellularly, Dcad99C is localized in the apical plasma membrane of epithelial cells and restricted to microvilli in follicle cells during mid-oogenesis. Interestingly, the overexpression of Dcad99C induces apical cellular protrusions. Therefore, Dcad99C might have a function in microvilli morphogenesis like its mammalian orthologue, Protocadherin 15.