Understanding how epithelial polarity is established and regulated during tissue morphogenesis is a major issue. Here, we identify a regulatory mechanism important for mesoderm invagination, germ-band extension and transepithelial migration in the Drosophila melanogaster embryo. This mechanism involves the inhibition of the conserved E3 ubiquitin ligase Neuralized by proteins of the Bearded family. First, Bearded mutant embryos exhibited a loss of epithelial polarity associated with an early loss of the apical domain. Bearded regulated epithelial polarity by antagonizing neuralized. Second, repression of Bearded gene expression by Snail was required for the Snail-dependent disassembly of adherens junctions in the mesoderm. Third, neuralized was strictly required to promote the downregulation of the apical domain in the midgut epithelium and to facilitate the transepithelial migration of primordial germ cells across this epithelium. This function of Neuralized was independent of its known role in Notch signalling. Thus, Neuralized has two distinct functions in epithelial cell polarity and Notch signalling.