Signaling through the Hippo pathway controls various growth, tumorigenic, and developmental processes. Activation of the kinase Hippo leads to phosphorylation and nuclear exclusion of the transcription factor Yorkie (Yki), preventing it from activating genes that promote proliferation. Hippo activation requires the FERM domain proteins Merlin (Mer) and Expanded (Ex), which form an apically localized complex with the scaffolding protein Kibra. Midway through oogenesis in the fruit fly Drosophila melanogaster, the oocyte undergoes a dorsoventral polarization event that is initiated by the posterior follicle cells (PFCs), somatic epithelial cells that surround the oocyte and regulate its development. Yan et al. identified the phosphatidylinositol 4-kinase (PI4K) PI4KIIIalpha in a genetic screen for genes required in FCs for proper oocyte polarization. PI4KIIIalpha mutants showed a PFC-specific disruption of Notch signaling, similar to that seen in Hippo pathway mutants. In PI4KIIIalpha mutant FC clones, Mer was lost from the apical domain, and both Ex and Kibra (which are up-regulated in Hippo pathway mutants) increased in abundance. PI4Ks catalyze the production of phosphatidylinositol 4-phosphate (PIP4), which is a precursor of PIP2. PIP2 was lost from the apical membrane of PI4KIIIalpha mutant FCs. Staining with an antibody that recognizes the phosphorylated forms of ezrin, radixin, and moesin (phospho-ERM) indicated that these activated ERM proteins, which link the membrane with the actin cytoskeleton and require PIP2 for activation, were also missing from apical regions of PI4KIIIalpha mutant FCs. Because Mer is related to these ERM proteins and contains a PIP2 binding site, the authors speculated that PIP2 may be required to activate or stabilize Mer at the apical membrane. These results suggest that membrane lipid composition plays an important role in proper localization of Mer to the apical membrane and thus in Hippo signaling.