Many animal organs are composed largely or entirely of polarized epithelial tubes, and the formation of complex organ systems, such as the digestive or vascular systems, requires that separate tubes link with a common polarity. The Caenorhabditis elegans digestive tract consists primarily of three interconnected tubes-the pharynx, valve, and intestine-and provides a simple model for understanding the cellular and molecular mechanisms used to form and connect epithelial tubes. Here, we use live imaging and 3D reconstructions of developing cells to examine tube formation. The three tubes develop from a pharynx/valve primordium and a separate intestine primordium. Cells in the pharynx/valve primordium polarize and become wedge-shaped, transforming the primordium into a cylindrical cyst centered on the future lumenal axis. For continuity of the digestive tract, valve cells must have the same, radial axis of apicobasal polarity as adjacent intestinal cells. We show that intestinal cells contribute to valve cell polarity by restricting the distribution of a polarizing cue, laminin. After developing apicobasal polarity, many pharyngeal and valve cells appear to explore their neighborhoods through lateral, actin-rich lamellipodia. For a subset of cells, these lamellipodia precede more extensive intercalations that create the valve. Formation of the valve tube begins when two valve cells become embedded at the left-right boundary of the intestinal primordium. Other valve cells organize symmetrically around these two cells, and wrap partially or completely around the orthogonal, lumenal axis, thus extruding a small valve tube from the larger cyst. We show that the transcription factors DIE-1 and EGL-43/EVI1 regulate cell intercalations and cell fates during valve formation, and that the Notch pathway is required to establish the proper boundary between the pharyngeal and valve tubes.