Vertebrate claudin proteins are integral components of tight junctions, which function as paracellular diffusion barriers in epithelia. We identified Megatrachea (Mega), a Drosophila transmembrane protein homologous to claudins, and show that it acts in septate junctions, the corresponding structure of invertebrates. Our analysis revealed that Mega has transepithelial barrier function similar to the claudins. Also, Mega is necessary for normal tracheal cell morphogenesis but not for apicobasal polarity or epithelial integrity. In addition, we present evidence that Mega is essential for localization of the septate junction protein complex Coracle/Neurexin. The results indicate that claudin-like proteins are functionally conserved between vertebrates and Drosophila.