FXYD5 (dysadherin or RIC) is a transmembrane auxiliary subunit of the Na⁺/K⁺ ATPase shown to increase its V_max. FXYD5 has also been identified as a cancer associated protein whose expression in tumor derived cell lines impairs cytoskeletal organization and increases cell motility. Previously, we have demonstrated that the expression of FXYD5 in M1 cells derived from mouse kidney collecting duct, impairs the formation of tight and adherence junctions. The current study aimed to further explore effects of FXYD5 at a single cell level. It was found that in M1 as well as three other cell lines, FXYD5 inhibits transformation of adhered single cells from the initial radial shape to a flattened, elongated shape, in the first stage of monolayer formation. This is also correlated to less ordered actin cables and fewer focal points. Structure-function analysis has demonstrated that the transmembrane domain of FXYD5, and not its unique extracellular segment, mediates the inhibition of change in cell shape. This domain has been shown before to be involved in the association of FXYD5 with the Na⁺/K⁺ ATPase which leads to the increase in V_max. Furthermore, specific transmembrane point mutations in FXYD5 that either increase or decrease its effect on cell elongation had a corresponding effect on the co-immunoprecipitation of FXYD5 with αNa⁺/K⁺ ATPase . These findings lend support to the possibility that FXYD5 affects cell polarization through its transmembrane domain interaction with the Na⁺/K⁺ ATPase. Yet interaction of FXYD5 with other proteins can not be excluded.