Two biosynthetic pathways exist for delivery of membrane proteins to the apical surface of epithelial cells, direct transport from the trans‐Golgi network (TGN) and transcytosis from the basolateral membrane. Different epithelial cells vary in the expression of these mechanisms. Two extremes are MDCK cells, that use predominantly the direct route and hepatocytes, which deliver all apical proteins via the basolateral membrane. To determine how epithelial cells establish a particular targeting phenotype, we studied the apical delivery of endogenous dipeptidyl peptidase IV (DPPIV) at early and late stages in the development of monolayers of a highly polarized epithelial cell line derived from Fischer rat thyroid (FRT). In 1 day old monolayers, surface delivery of DPPIV from the TGN was unpolarized (50%/50%) but a large basal to apical transcytotic component resulted in a polarized apical distribution. In contrast, after 7 days of culture, delivery of DPPIV was mainly direct (85%) with no transcytosis of the missorted component. A basolateral marker, Ag 35/40 kD, on the other hand, was directly targeted (90–98%) at all times. These results indicate that the sorting machinery for apical proteins develops independently from the sorting machinery for basolateral proteins and that the sorting site relocates progressively from the basal membrane to the TGN during development of the epithelium. The transient expression of the transcytotic pathway may serve as a salvage pathway for missorted apical proteins when the polarized phenotype is being established.