The hep I peptide of thrombospondin-1 is known to induce the disassembly of focal adhesions, a critical step in regulating cellular adhesive changes needed for cell motility. Fibroblasts that are heterogeneous with respect to the surface expression of Thy-1 differ markedly in morphology, cytoskeletal organization, and migration, suggesting differential regulation of focal adhesion dynamics. Here we demonstrate that disassembly of focal adhesions mediated by both full-length thrombospondin-1 and the hep I peptide in fibroblasts requires the expression of Thy-1, although it does not appear to function as a stable member of the hep I receptor complex. Consistent with a known function of Thy-1 in regulating lipid raft-associated signaling, intact lipid rafts are necessary for hep I-mediated focal adhesion disassembly. Furthermore, we establish Src family kinase (SFK) activation as a novel component required for hep I-induced signaling leading to focal adhesion disassembly. hep I induces transient phosphorylation of SFKs in Thy-1-expressing fibroblasts only. Therefore, we conclude that Thy-1 surface expression is required for thrombospondin-1-induced focal adhesion disassembly in fibroblasts through an SFK-dependent mechanism. This represents a novel role for Thy-1 in the regulation of fibroblast-matrix interactions critical to tissue homeostasis and remodeling.