Epithelial cysts - cavities formed from monolayers of polarised epithelial cells - serve as progenitors for many mammalian organs. However, what controls cyst formation is poorly understood. Hirose et al. now report that the polarity protein PAR3 is required for the formation of epicardial progenitor(EPP) cell cysts in mice (see p. 1389). During mammalian heart development, cysts made from EPP cells migrate to the myocardium and envelop it in a layer of epicardial cells. The researchers show that targeted disruption of the mouse Par3 gene causes midgestational embryonic lethality with defective epicardial development. They report that PAR3-deficient EPP cells form normal cell-cell junctions and basal domains but do not establish apical cortical domains or form cell cysts. Because cell-cell and cell-extracellular matrix interactions (which occur through basal domains)provide the spatial cues for epithelial cell polarity, these results suggest that PAR3 normally interprets these cues and, importantly, they provide the first evidence for the involvement of PAR3 in epithelial polarity and tissue organisation during mammalian development.