Fas-associated factor 1 (FAF1) is a scaffolding protein that plays multiple functions, and dysregulation of FAF1 is associated with many types of diseases such as cancers. FAF1 contains multiple ubiquitin-related domains (UBA, UBL1, UBL2, UAS, and UBX), each domain interacting with a specific partner. In particular, the interaction of UBL1 with heat shock protein 70 (Hsp70) is associated with tumor formation, although the molecular understanding remains unknown. In this study, the structural analysis revealed that His160 of FAF1 is important for its interaction with Hsp70. The association of Hsp70 with FAF1 is required for the interaction with IQGAP1. FAF1 negatively regulates RhoA activation by FAF1–Hsp70 complex formation, which then interacts with IQGAP1. These steps play a key role in maintaining the stability of cell-to-cell junction. We conclude that FAF1 plays a critical role in the structure and function of adherens junction during tissue homeostasis and morphogenesis by suppressing RhoA activation, which induces the activation of Rho-associated protein kinase, phosphorylation of myosin light chain, formation of actin stress fiber, and disruption of adherens junction. In addition, depletion of FAF1 increased collective invasion in a 3D spheroid cell culture. These results provide insight into how the FAF1–Hsp70 complex acts as a novel regulator of the adherens junction integrity. The complex can be a potential therapeutic target to inhibit tumorigenesis and metastasis.