The cellularization that converts the syncytial Drosophila embryo into thousands of distinct cells is a hybrid form of cleavage. It derives from cytokinesis and has acquired specific features required for epithelial biogenesis. Cellularization generates an epithelial layer in which adjacent cells are connected by apical adherens junctions. If this process goes awry, subsequent development is dramatically affected, in particular tissue remodelling during gastrulation. Cellularization is associated with the invagination of the plasma membrane between adjacent nuclei at the cell cortex, the formation of a basal-lateral surface and the assembly of apical adherens junctions. The regulated mobilization of intracellular pools of vesicles at defined sites of the plasma membrane underlies membrane growth and surface polarization. Genetic approaches have identified conserved core cellular pathways required for these processes, such as vesicular trafficking along the biosynthetic and endocytic routes, and vesicular insertion into the plasma membrane. The novel proteins Nullo and Slam, which are specifically induced during cellularization, represent developmental regulators of membrane growth during cellularization.