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Classical cadherins are well-known adhesion molecules responsible for physically connecting neighboring cells and signaling this cell–cell contact. Recent studies have suggested novel signaling roles for “non-junctional” cadherins (NJCads); however, the function of cadherin signaling independent of cell–cell contacts remains unknown. In this study, mesendodermal cells and tissues from gastrula stageXenopus laevisembryos demonstrate that deletion of extracellular domains of Cadherin3 (Cdh3; formerly C-cadherin inXenopus) disrupts contact inhibition of locomotion. In both bulk Rac1 activity assays and spatio-temporal FRET image analysis, the extracellular and cytoplasmic Cdh3 domains disrupt NJCad signaling and regulate Rac1 activity in opposing directions. Stabilization of the cytoskeleton counteracted this regulation in single cell migration assays. Our study provides novel insights into adhesion-independent signaling by Cadherin3 and its role in regulating single and collective cell migration.