The Frizzled (Fz; called here Fz1) and Fz2 receptors have distinct signaling specificities activating either the canonical Wnt/-catenin pathway or Fz/planar cell polarity (PCP) signaling in Drosophila. The regulation of signaling specificity remains largely obscure. We show that Fz1 and Fz2 have different subcellular localizations in imaginal disc epithelia, with Fz1 localizing preferentially to apical junctional complexes, and Fz2 being evenly distributed basolaterally. The subcellular localization difference directly contributes to the signaling specificity outcome. Whereas apical localization favors Fz/PCP signaling, it interferes with canonical Wnt/-catenin signaling. Receptor localization is mediated by sequences in the cytoplasmic tail of Fz2 that appear to block apical accumulation. Based on these data, we propose that subcellular Fz localization, through the association with other membrane proteins, is a critical aspect in regulating the signaling specificity within the Wnt/Fz signaling pathways.