Epithelial cells undergo dynamic polarity changes as organs pattern, but the relationship between epithelial polarity and cell fate is poorly understood. Using the developing lung as a model, we found that distinct alterations in apical-basal polarity dictate airway epithelial differentiation. We demonstrate that Crb3, a Crumbs isoform that determines epithelial apical domain identity, is required for airway differentiation by controlling the localization of the transcriptional regulator Yap. We show that Crb3 promotes the interaction between Yap and the Hippo pathway kinases Lats1/2 at apical cell junctions to induce Yap phosphorylation and cytoplasmic retention, which drive cell differentiation. Loss of Crb3 in developing mouse airways or isolated adult airway progenitors results in unrestricted nuclear Yap activity and consequent cell differentiation defects. Our findings demonstrate that polarity-dependent cues control airway cell differentiation, offering important molecular insights into organ patterning.
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