Catty-corner, kitty-corner, and cater-cornered all derive from the Middle English catre-corner, literally meaning four-cornered. All three forms are used throughout the English-speaking world. They usually mean positioned diagonally across a four-way intersection, but they can work in other contexts relating to one thing being diagonal from another.
While most dictionaries recommend cater-cornered, kitty-corner and catty-corner are more common in actual usage. The past-participial forms—i.e., kitty-cornered and catty-cornered—might be more grammatically correct, but the uninflected forms are more common.
Kitty-corner from Brownstone in Fort Worth, Fred’s serves terrific sloppy burgers and great fries. [Dallas Morning News]
The child then pointed catty-corner across Santa Rosa Avenue. [Santa Rosa Press Democrat]
His trailer is cater-cornered to the crime scene, a fact he admitted shook him a little. [Columbia Daily Tribune]
Cowboys Stadium technically is in Arlington, Texas—not Dallas—kitty-cornered from where the Giants won the World Series in November. [San Jose Mercury News]