A fundamental process in biology is the de novo formation and morphogenesis of polarized tubules. Although these processes are essential for the formation of multiple metazoan organ systems, little is known about the molecular mechanisms that regulate them. In this study, we have characterized several steps in tubule formation and morphogenesis using the mouse kidney as a model system. We report that kidney mesenchymal cells contain discrete Par3-expressing membrane microdomains that become restricted to an apical domain, coinciding with lumen formation. Once lumen formation has been initiated, elongation occurs by simultaneous extension and additional de novo lumen generation. We demonstrate that lumen formation and elongation require afadin, a nectin adaptor protein implicated in adherens junction formation. Mice that lack afadin in nephron precursors show evidence of Par3-expressing membrane microdomains, but fail to develop normal apical-basal polarity and generate a continuous lumen. Absence of afadin led to delayed and diminished integration of nectin complexes and failure to recruit R-cadherin. Furthermore, we demonstrate that afadin is required for Par complex formation. Together, these results suggest that afadin acts upstream of the Par complex to regulate the integration and/or coalescence of membrane microdomains, thereby establishing apical-basal polarity and lumen formation/elongation during kidney tubulogenesis.