Polarization of the airway epithelial cells (AECs) in the airway lumen is critical to the proper function of the mucociliary escalator and maintenance of lung health, but the cellular requirements for polarization of AECs are poorly understood. Using human AECs and cell lines, we demonstrate that cadherin-26 (CDH26) is abundantly expressed in differentiated AECs, localizes to the cell apices near ciliary membranes, and has functional cadherin domains with homotypic binding. We find a unique and non-redundant role for CDH26, previously uncharacterized in AECs, in regulation of cell-cell contact and cell integrity through maintaining cytoskeletal structures. Overexpression of CDH26 in cells with a fibroblastoid phenotype increases contact inhibition and promotes monolayer formation and cortical actin structures. CDH26 expression is also important for localization of planar cell polarity proteins. Knockdown of CDH26 in AECs results in loss of cortical actin and disruption of CRB3 and other proteins associated with apical polarity. Together, our findings uncover previously unrecognized functions for CDH26 in the maintenance of actin cytoskeleton and apicobasal polarity of AECs.