The integrity of polarized epithelia is critical for development and human health. Many questions remain concerning the full complement and the function of the proteins that regulate cell polarity. Here we report that the Drosophila FERM proteins Yurt (Yrt) and Coracle (Cora) and the membrane proteins Neurexin IV (Nrx-IV) and Na(+),K(+)-ATPase are a new group of functionally cooperating epithelial polarity proteins. This 'Yrt/Cora group' promotes basolateral membrane stability and shows negative regulatory interactions with the apical determinant Crumbs (Crb). Genetic analyses indicate that Nrx-IV and Na(+),K(+)-ATPase act together with Cora in one pathway, whereas Yrt acts in a second redundant pathway. Moreover, we show that the Yrt/Cora group is essential for epithelial polarity during organogenesis but not when epithelial polarity is first established or during terminal differentiation. This property of Yrt/Cora group proteins explains the recovery of polarity in embryos lacking the function of the Lethal giant larvae (Lgl) group of basolateral polarity proteins. We also find that the mammalian Yrt orthologue EPB41L5 (also known as YMO1 and Limulus) is required for lateral membrane formation, indicating a conserved function of Yrt proteins in epithelial polarity.