Epithelial cells form monolayers of polarized cells with apical and basolateral surfaces. Madin-Darby canine kidney epithelial cells transiently lose their apico-basolateral polarity and become motile by treatment with hepatocyte growth factor (HGF), which causes the monolayer to remodel into tubules. HGF induces cells to produce basolateral extensions. Cells then migrate out of the monolayer to produce chains of cells, which go on to form tubules. Herein, we have analyzed the molecular mechanisms underlying the production of extensions and chains. We find that cells switch from an apico-basolateral polarization in the extension stage to a migratory cell polarization when in chains. Extension formation requires phosphatidyl-inositol 3-kinase activity, whereas Rho kinase controls their number and length. Microtubule dynamics and cell division are required for the formation of chains, but not for extension formation. Cells in the monolayer divide with their spindle axis parallel to the monolayer. HGF causes the spindle axis to undergo a variable “seesaw” motion, so that a daughter cells can apparently leave the monolayer to initiate a chain. Our results demonstrate the power of direct observation in investigating how individual cell behaviors, such as polarization, movement, and division are coordinated in the very complex process of producing multicellular structures.