Paxillin is a key regulatory component of focal adhesion sites, implicated in controlling cell-substrate interactions and cell movement. We analyse the function of a Dictyostelium discoideum paxillin homologue, PaxB, which contains four highly conserved LD and four LIM domains, but lacks two characteristic tyrosine residues, that form the core of vertebrate SH2-binding domains. PaxB is expressed during growth and all stages of development, but expression peaks during slug formation. Using a paxB-gfp knockin strain we show the existence of focal adhesions and characterise their dynamics. During multicellular development PaxB is not only found in focal adhesions at the cell-substrate interface, but also in the tips of filopodial structures predominantly located at the trailing ends of cells. paxB- strains are less adhesive to the substrate, they can aggregate but multicellular development from the mound stage onwards is severely impeded. paxB- strains are defective in proper cell type proportioning, cell sorting, slug migration and form-defective fruiting bodies. Mutation of a conserved JNK phosphorylation site, implicated in the control of cell migration, does not have any major effects on cell sorting, slug migration or morphogenesis in Dictyostelium. PaxB does not appear to function redundantly with its closest relative Lim2 (paxA), which when deleted also results in a mound arrest phenotype. However, analysis of paxA- and paxB- single and double null mutants suggest that PaxB may act upstream of Lim2.