The development of the complex network of epithelial tubes that ultimately forms the Drosophila tracheal system relies on cell migration, cell shape changes, cell rearrangements, cell differentiation, and branch fusion . Most of these events are controlled by a combination of distinct transcription factors and cell-cell signaling molecules, but few proteins that do not fall within these two functional classes have been associated with tracheal development. We show that the MAGUK protein Polychaetoid (Pyd/ZO-1), the Drosophila homolog of the junctional protein ZO-1 , plays a dual role in the formation of tracheal tubes. pyd/ZO-1 mutant embryos display branch fusion defects due to the lack of reliable determination of the fusion cell fate. In addition, pyd/ZO-1 mutant embryos show impaired cell intercalation in thin tracheal branches. Pyd/ZO-1 localizes to the adherens junctions (AJs) in tracheal cells and might thus play a direct role in the regulation of the dynamic state of the AJ during epithelial remodeling. Our study suggests that MAGUK proteins might play important roles during AJ remodeling in epithelial morphogenesis.