FAT4 mutations lead to several human diseases that disrupt the normal development of the kidney. However, the underlying mechanism remains elusive. In studying the duplex kidney phenotypes observed upon deletion of Fat4 in mice, we have uncovered an interaction between the atypical cadherin FAT4 and RET, a tyrosine kinase receptor essential for kidney development. Analysis of kidney development in Fat4-/- kidneys revealed abnormal ureteric budding and excessive RET signaling. Removal of one copy of the RET ligand Gdnf rescues Fat4-/- kidney development, supporting the proposal that loss of Fat4 hyperactivates RET signaling. Conditional knockout analyses revealed a non-autonomous role for Fat4 in regulating RET signaling. Mechanistically, we found that FAT4 interacts with RET through extracellular cadherin repeats. Importantly, expression of FAT4 perturbs the assembly of the RET-GFRA1-GDNF complex, reducing RET signaling. Thus, FAT4 interacts with RET to fine-tune RET signaling, establishing a juxtacrine mechanism controlling kidney development.