Effective wound closure mechanisms are essential for maintenance of epithelial structure and function. The repair of wounded epithelia is primarily driven by the cells bordering the wound, which become motile after wounding, forming dynamic actin protrusions along the wound edge. The molecular mechanisms that trigger wound edge cells to become motile following tissue damage are not well understood. Using wound healing and dorsal closure in Drosophila, we identify a direct molecular link between changes in cell-cell adhesion at epithelial edges and induction of actin protrusion formation. We find that the scaffolding protein Par3/Bazooka and the lipid phosphatase Pten are specifically lost from cell-cell junctions at epithelial edges. This results in a localized accumulation of phosphatidylinositol 3,4,5-trisphosphate (PIP3), which promotes the formation of actin protrusions along the epithelial edge. Depleting PIP3 results in defective epithelial closure during both dorsal closure and wound healing. These data reveal a novel mechanism that directly couples loss of epithelial integrity to activation of epithelial closure.