Hepatocytes polarize by forming functionally distinct sinusoidal (basolateral) and canalicular (apical) plasma membrane domains. Two distinct routes are used for delivery of membrane proteins to the canaliculus. Proteins having glycosylphosphatidylinositol anchors or single transmembrane domains are targeted to the sinusoidal plasma membrane from where they transcytose to the canalicular domain. In contrast, apical ATP-binding-cassette (ABC) transporters, which are required for energy-dependent biliary secretion of bile acids (ABCB11), phospholipids (ABCB4), and nonbile acid organic anions (ABCC2), lack initial residence in the basolateral plasma membrane and traffic directly from Golgi membranes to the canalicular membrane. While investigating mechanisms of apical targeting in WIF-B9 cells, a polarized hepatic epithelial cell line, we observed that rab11a is required for canalicular formation. Knockdown of rab11a or overexpression of the rab11a-GDP locked form prevented canalicular formation as did overexpression of the myosin Vb motorless tail domain. In WIF-B9 cells, which lack bile canaliculi, apical ABC transporters colocalized with transcytotic membrane proteins in rab11a-containing endosomes and, unlike the transcytotic markers, did not distribute to the plasma membrane. We propose that polarization of hepatocytes (i.e., canalicular biogenesis) requires recruitment of rab11a and myosin Vb to intracellular membranes that contain apical ABC transporters and transcytotic markers, permitting their targeting to the plasma membrane. In this model, polarization is initiated upon delivery of rab11a-myosin Vb-containing membranes to the surface, which causes plasma membrane at the site of delivery to differentiate into apical domain (bile canaliculus).