The correct targeting and trafficking of the adherens junction protein epithelial cadherin (E-cadherin) is a major determinant for the acquisition of epithelial cell polarity and for the maintenance of epithelial integrity. The compartments and trafficking components required to sort and transport E-cadherin to the basolateral cell surface remain to be fully defined. On the basis of previous data, we know that E-cadherin is trafficked via the recycling endosome (RE) in nonpolarized and newly polarized cells. Here we explore the role of the RE throughout epithelial morphogenesis in MDCK monolayers and cysts. Time-lapse microscopy in live cells, altering RE function biochemically, and expressing a dominant-negative form of Rab11 (DN-Rab11), each showed that the RE is always requisite for E-cadherin sorting and trafficking. The RE remained important for E-cadherin trafficking in MDCK cells from a nonpolarized state through to fully formed, polarized epithelial monolayers. During the development of epithelial cysts, DN-Rab11 disrupted E-cadherin targeting and trafficking, the subapical localization of pERM and actin, and cyst lumen formation. This final effect demonstrated an early and critical interdependence of Rab11 and the RE for E-cadherin targeting, apical membrane formation, and cell polarity in cysts.