In addition to quantitative differences in morphogen signaling specifying cell fates, the vector and slope of morphogen gradients influence planar cell polarity (PCP) and growth. The cadherin Fat plays a central role in this process. Fat regulates PCP and growth through distinct downstream pathways, each involving the establishment of molecular polarity within cells. Fat is regulated by the cadherin Dachsous (Ds) and the protein kinase Four-jointed (Fj), which are expressed in gradients in many tissues. Previous studies have implied that Fat is regulated by the vector and slope of these expression gradients. Here, we characterize how cells interpret the Fj gradient. We demonstrate that Fj both promotes the ability of Fat to bind to its ligand Ds and inhibits the ability of Ds to bind Fat. Consequently, the juxtaposition of cells with differing Fj expression results in asymmetric Fat:Ds binding. We also show that the influence of Fj on Fat is a direct consequence of Fat phosphorylation and identify a phosphorylation site important for the stimulation of Fat:Ds binding by Fj. Our results define a molecular mechanism by which a morphogen gradient can drive the polarization of Fat activity to influence PCP and growth.