The organization of tissues depends on intercellular junctions that connect individual cells to each other. In sheets of epithelial cells the junctions contain different components like adherens junctions or tight junctions in an asymmetric distribution along the cell-cell contacts. Tight junctions are located at the most apical region of cell junctions, act as a regulatable barrier for small solutes, and separate the apical membrane domain from the basolateral membrane domain. For a long time, the mechanisms that underly the formation of tight junctions and the development of apico-basal membrane polarity in epithelial cells have been poorly understood. Recently, strong evidence has been provided which implicates a conserved set of cell polarity proteins--the PAR proteins--in this process. Here we discuss the mechanisms by which PAR proteins regulate the formation of cell junctions with a special emphasis on vertebrate epithelial cells.