Kidney-derived Madin Darby canine kidney (MDCK) cells form lumina at their apices, and target luminal proteins to an intracellular vacuolar apical compartment (VAC) when prevented from polarizing. Hepatocytes, by contrast, organize their luminal surfaces (the bile canaliculi; BC) between their lateral membranes, and, when nonpolarized, they display an intracellular luminal compartment that is distinct from the VACs of MDCK cells. Overexpression of the serine/threonine kinase Par1b/EMK1/MARK2 induces BC-like lateral lumina and a hepatic-type intracellular luminal compartment in MDCK cells, suggesting a role for Par1b in the branching decision between kidney- and hepatic-type epithelial phenotypes. Here, we report that Par1b promotes lateral lumen polarity in MDCK cells independently of Ca(2+)-mediated cell-cell adhesion by inhibiting myosin II in a rho kinase-dependent manner. Polarization was inhibited by E-cadherin depletion but promoted by an adhesion-defective E-cadherin mutant. By contrast, apical surface formation in control MDCK cells required Ca(2+)-dependent cell-cell adhesion, but it occurred in the absence of E-cadherin. We propose that E-cadherin, when in an adhesion-incompetent state at the lateral domain, serves as targeting patch for the establishment of lateral luminal surfaces. E-cadherin depletion also reverted the hepatic-type intracellular luminal compartment in Par1b-MDCK cells to VACs characteristic of control MDCK cells, indicating a novel link between E-cadherin and luminal protein targeting.