Molecular and cellular mechanisms of epithelial–mesenchymal transition (EMT), crucial in development and pathogenesis, are still poorly understood. Here we provide evidence that distinct cellular steps of EMT occur sequentially during gastrulation. Basement membrane (BM) breakdown is the first recognizable step and is controlled by loss of basally localized RhoA activity and its activator neuroepithelial-transforming-protein-1 (Net1). Failure of RhoA downregulation during EMT leads to BM retention and reduction of its activity in normal epithelium leads to BM breakdown. We also show that this is in part mediated by RhoA-regulated basal microtubule stability. Microtubule disruption causes BM breakdown and its stabilization results in BM retention. We propose that loss of Net1 before EMT reduces basal RhoA activity and destabilizes basal microtubules, causing disruption of epithelial cell–BM interaction and subsequently, breakdown of the BM.