The dynamic rearrangement of cell-cell contacts is required for the establishment of functional epithelial cell sheets. However, the signaling pathways and cellular mechanisms that initiate and maintain this polarity are not well understood. We show that loss of the Wnt signaling component GSK3 beta results in increased levels of aPKC and leads to defects in apical-basal polarity. We find that GSK3 beta directly phosphorylates aPKC, which likely promotes its ubiquitin-mediated proteosomal degradation. aPKC increases the levels of Armadillo and stabilizes adherens junctions. These results suggest that the Wnt pathway component GSK3 beta regulates the polarity determinant aPKC, which in turn affects cell-cell contacts during the development of polarized tissues.