E-cadherin plays a pivotal role in epithelial morphogenesis. It controls the 
intercellular adhesion required for tissue cohesion and anchors the 
actomyosin-driven tension needed to change cell shape. In the early Drosophila 
embryo, Myosin-II (Myo-II) controls the planar polarized remodelling of cell 
junctions and tissue extension. The E-cadherin distribution is also planar 
polarized and complementary to the Myosin-II distribution. Here we show that 
E-cadherin polarity is controlled by the polarized regulation of clathrin- and 
dynamin-mediated endocytosis. Blocking E-cadherin endocytosis resulted in cell 
intercalation defects. We delineate a pathway that controls the initiation of 
E-cadherin endocytosis through the regulation of AP2 and clathrin coat 
recruitment by E-cadherin. This requires the concerted action of the formin 
Diaphanous (Dia) and Myosin-II. Their activity is controlled by the guanine 
exchange factor RhoGEF2, which is planar polarized and absent in 
non-intercalating regions. Finally, we provide evidence that Dia and Myo-II 
control the initiation of E-cadherin endocytosis by regulating the lateral 
clustering of E-cadherin.