Correct patterning and polarization of epithelial and mesenchymal cells are essential for morphogenesis and function of all organs and organisms. Epithelial cells are generally polarized in two axes: (a) the ubiquitous apical-basal axis and (b) polarity within the plane of the epithelium. The latter is generally referred to as planar cell polarity (PCP) and also is found in several contexts of mesenchymal cell patterning. In Drosophila, all adult structures display PCP features, and two conserved molecular systems (the Fat [Ft]/Dachsous [Ds] system and the Frizzled [Fz]/PCP pathway) that regulate this process have been identified. Although significant progress has been made in dissecting aspects of PCP signaling within cells, much remains to be discovered about the mechanisms of long-range and local PCP cell-cell interactions. Here, we discuss the current models based on Drosophila studies and incorporate recent insights into this long-standing cell and developmental biology problem.